Municipal League Director Says Severance Tax Petition Still Short On Signatures

Arkansas Municipal League director Don Zimmerman issued an email Monday (June 11) to advocates of a hike in the severance tax on natural gas and warned that the petition campaign is still short of its required signature goal.

The measure, known as the Natural Gas Severance Tax Act of 2012, is being pushed by former natural gas executive Sheffield Nelson and has been endorsed by the Arkansas Municipal League, which represents more than 500 cities in Arkansas.

The proposed initiated act would raise Arkansas' severance tax on natural gas to a flat 7% rate and could bring in an estimated $250 million annually. Twenty million dollars of the tax would be steered to municipalities for road repairs and construction. After that, the remaining balance would be divided 70% to the state, 15% to counties and 15% to cities.

In an email obtained by Talk Business, Zimmerman says:

As many of you will recall, we voted at last year’s League convention to endorse this proposal and help with the signature campaign. The League’s record on achieving our goals and objectives is very high. We certainly don’t want to fail on something as potentially beneficial as this proposal.

To date we have not produced the number of necessary signatures to get this measure to a vote of the people.

The effort needs to collect more than 62,507 valid

Arkansas voter signatures by July 6 to be approved for the November election.

Zimmerman confirmed to Talk Business that he sent the email and that the campaign is short of its necessary goal. Stating that his organization was not the depository for the signatures, Zimmerman declined to estimate how many signatures short the effort may be.

His email also countered an advocacy group's claim that the severance tax proposal would be a “jobs killer.” Arkansans for Jobs and Affordable Energy, a group organized to defeat the severance tax proposal and largely funded by natural gas companies, has said the measure would be detrimental to jobs in Arkansas and will lead to gas companies curtailing production in the state.

Zimmerman's email said:

Some have tried to label this proposal as being “anti-jobs.” In actuality it will be “pro-jobs” as the natural gas production will continue just as it does in places such as Texas and Oklahoma who charge fair severance taxes while at the same time additional jobs will be created by the street, road and highway projects that will come about from the additional revenue.

The end result will be more jobs. – i.e. gas jobs plus highway jobs. If low severance taxes determined where natural gas drillers operated, we would have all of the Texas and Oklahoma operators already here.