March 31 Special Session for Severance Tax Increase

Gov. Mike Beebe will call the Arkansas legislature into special session beginning March 31 to address the address a severance tax on natural gas extraction in Arkansas. The Governor's proposed tax is expected to raise an estimated $57 million in taxes next year and about $100 million annually by 2012. The Governor wants the taxes to be used for roads.

Beebe obtained commitments from legislators before calling the special session. Beebe said 80 House members and 31 senators were committed to the increase; he needed a commitment from 75 representatives and 27 senators. If the tax is passed by the legislature, the issue will not go to the voters in November for a vote. In a news conference, Beebe said, "We do not want to hurt a wonderful industry and economic boon to our state that's providing jobs and resources. But we do want them to pay for posterity and fairness and equity, a severance tax that is designed to pay for a nonrenewing, finite resource that our children and grandchildren won't have the benefit of."

Beebe said raising the tax was the best way to provide additional money for state highways without raising taxes on gasoline or diesel as fuel prices are already high. However, he also said that $100 million won't be enough for highways but is "a step in the right direction." State highways commission has identified that they will need $16 billion more than will be available over the next 10 years.

With a special session, legislators may try to fix a typographical error in a marriage-age law that inadvertently allows children of any age to marry if they have their parents' permission. And legislators might be asked to provide further incentives for the North Little Rock and Pulaski County Special school districts to carry out desegregation without federal intervention. House Speaker Benny Petrus (D-Stuttgart) said that Rep. Chris Thyer (D-Jonesboro) is drafting a bill to repeal the marriage-age law enacted last year and the bill would reinstate 17 as the marriage age for boys and 16 for girls. Rep. Will Bond (D-Jacksonville) is drafting legislation extending the deadline for North Little Rock and Pulaski County schools to seek unitary status.

Republican legislators including the House Minority leader Johnny Key have opposed Beebe's proposal severance tax increase identifying that a tax could hurt business. But several Republican lawmakers have now announced they were supporting the increase. In addition, Sen. Bob Johnson (D-Bigelow), who had been a vocal opponent of the tax hike, said he was not going to organize any opposition to Beebe's tax proposal.

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