Area elected officials united Monday in voicing opposition to a natural gas severance tax proposal that could find its way onto the general election ballot in November.
Democratic Congressman Mike Ross and Republican Congressman Tim Griffin were united in voicing opposition to a proposed increase in Arkansas’ natural gas severance tax.
They were joined at the roundtable discussion, held at the Conway Area Chamber of Commerce, by Conway Mayor Tab Townsell, Conway Alderman Mark Vaught and Faulkner County Judge Preston Scroggin, all of whom joined the lawmakers in voicing opposition to the tax proposal.
Former natural gas executive Sheffield Nelson is proposing that the tax be raised to 7 percent. Wells are currently taxed at between 1.25 and 5 percent of the value of the gas that’s taken from the land.
Ross, a member of the House Committee on Energy and Commerce and a possible gubernatorial candidate in 2014, said that both he and Griffin feel the proposal "is
a bad idea for Arkansas if we want to keep the state competitive."
Ross said he supported a severance tax increase that Gov. Mike Beebe signed into law in 2008. That increase was the result of a compromise with natural gas companies; however, any further increases could cripple the natural gas industry in Arkansas, Ross said.
"If we continue to increase taxes, all we’re going to do is drive natural gas production and the jobs that go with it out of this state, and that’s a stupid idea," Ross said.
Griffin agreed, saying that the adage "If you want more of something, tax it less" applies in this case.
"The area in Conway and around it has been booming, and much of that is due to natural gas," Griffin said. "We should do no harm to this resource by taxing it more."
Nelson has until July 6 to submit 62,507 signatures needed to place the tax referendum on the ballot. Ross and Griffin are among elected officials who have come out against the tax proposal in recent weeks, part of an organized campaign to snuff the proposed measure before the it makes it onto the ballot. Beebe, a Democrat, has said he plans on voting against the tax.
Scroggin said that although the natural gas industry has had issues in the past few years, many of the issues have been addressed. He said he thinks it is "ridiculous" to be revisiting the several tax hike issue three years after it was defeated.
Conway City Council will consider adopting a resolution opposing the tax proposal. Townsell said he is not presuming what the council will do, but he made it clear that he feels a tax increase would have a negative impact on the city.
Nelson, who has said additional tax revenue is needed to pay for road damage caused by natural gas drillers, said he’s continuing to gather signatures for the measure. He did not offer an estimate on the number of signatures gathered or a timeline for submitting them. He said he believes the measure would win over voters despite opposition from some of the state’s top elected officials.