From Ballotpedia

The Arkansas Severance Tax Increase Question may appear on the 2012 ballot in the state of Arkansas as a initiated state statute. The measure would raise the severance tax levy on companies for natural gas from 5 to 7 percent. The initiative, proposed by Sheffield Nelson, a former gas company executive and gubernatorial candidate, seeks to help fill an estimated $15 billion gap between highway needs and projected revenues over the next ten years.^[1]

The current tax that was passed in 2008 is designed to generate about $100 million per year, but Nelson argues that that amount of money is not enough for road projects. Sheffield Nelson stated on June 16, 2011 that he was re-drafting his proposal. According to Nelson, the plan would mandate that 70% of revenue from the severance tax would go to the state Highway and Transportation Department, while the remaining revenue would be divided among cities and counties. The proposal would also create a $20 million fund to go toward repairing city streets.^[2][3][4]

Support

The following is information obtained from the supporting side of the measure:

• The Arkansas Municipal League has endorsed the measure.
• Arkansas Governor Mike Beebe has state support for the measure. However, recent reports as of January 2012 stated that the governor is "re-evaluating" his support.^[5]

Opposition

The following is information obtained from the opposing side of the measure:

Opponents

• Arkansas Governor Mike Beebe is an opponent of the measure.^[6]

Arguments

• The County Judges' Association of Arkansas stated opposition to the measure.^[7]
• Fifteen Republicans and three Democrats signed the letter urging the Arkansas Municipal League to oppose the measure during January 2012.^[8]
• Faulkner County Judge Preston Scroggin argued: “We’ve grown with the industry and they’ve grown with us. We have a system that’s working now. To go back and do this (raise the tax) is just, to borrow a term, a money grab. It won’t be the boon some think it is.”^[9]
• A rally was held on March 1, 2012 in opposition to the measure, where opponents of the petition drive for ballot placement marched to the Capitol chanting, "Save our jobs".
  • During that rally, Randy Zook with the Arkansas Chamber of Commerce stated: "The reason we oppose this issue is very straight forward. We're convinced, we're certain that it will threaten the existence of hundreds, if not thousands of jobs across the state of Arkansas. It would harm and hinder our ability to compete with other states."^[10]
• According to U.S. Senator Mark Pryor: “With the price of natural gas at an all-time low, we don’t need a big jump in the severance tax to make it more difficult for Arkansas drillers to compete with other states."^[11]
• Arkansas Lieutenant Governor Mark Darr stated: “During “these trying times we don’t want to do anything that is a hindrance to keeping and creating new jobs in our state. We are also very sensitive to our royalty owners who would be affected.”^[11]

Polls

See also: Polls, 2012 ballot measures

• A poll was taken on March 26, 2012 asking voters if they would vote for or against the measure if the election was that day. The results of the poll are found below.^[12]

Date of Poll	Pollster	In favor	Opposed	Undecided	Number polled
Mar. 26, 2012	Talk Business-Hendrix College	28%	55%	17%	759

Path to the ballot

In order to get the measure on the ballot, signatures from at least 8 percent of voters who cast ballots in the last gubernatorial election must be collected. This amounts to about 62,000, according to reports. Nelson filed paperwork with the Arkansas Attorney General in order to get the measure approved for circulation. However, Attorney General Dustin McDaniel rejected the proposed measure on February 22, 2011, citing ambiguities in the text of the proposal. Nelson stated that he would revise and re-submit the proposal in the days following the rejection.

During the week of March 15, 2011, after the measure was re-submitted, McDaniel approved the popular title, clearing the way for petition circulation, despite one recommendation to revise the ballot title. In McDaniel's opinion, the Arkansas Attorney General wrote, "Having analyzed your proposed amendment as well as your proposed popular name and ballot title under the above precepts, it is my conclusion that the popular name is sufficient as submitted. It is therefore hereby approved as submitted. With regard to the ballot title, a minor change is in my opinion necessary to make it more suitable and correct."^[2][13][14]

Revised proposal

On June 30, 2011, a new revised version of the proposal was filed by Nelson, with the new measure directing an additional $20 million for city street upgrades. The new addition to the proposal was added after Nelson stated he met with city officials across the state, concluding that more money is needed to fix city streets damaged by trucks coming to and from the Fayetteville Shale play area, where a majority of natural gas is produced in the state. In a letter to Arkansas Attorney General Dustin McDaniel: "We are convinced that a true need exists for such funding and proposed to address the problem with this filing."^[15]

McDaniel approved the revised proposal during the week of July 8, 2011.^[16]

See also

• Arkansas 2012 ballot measures
• 2012 ballot measures

References

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