Republicans Respond to Gov. Bebee's Severance Tax Agreement

RPA Press Release: On Monday, Governor Mike Beebe announced that officials of the oil and gas industries and his office had come to terms with an agreement to raise the tax on natural gas by 5%. In order for this agreement to become law, it must pass both houses of the legislature by three-fourths vote.

Johnny Key (R - Mountain Home), the Arkansas House Minority Leader, issued the following statement today on the proposed settlement between the Arkansas gas companies and Governor Mike Beebe:

“I appreciate the comments of Sen. Bob Johnson concerning the so-called agreement on the severance tax. He makes a compelling case for the detrimental economic effects the Governor’s tax hike will have on the economic growth and job creation stemming from the Fayetteville Shale play. I agree with Sen. Johnson that when presented with the choice of good jobs or tax hikes, we must choose good jobs over taxing an industry just because it is successful.

Another critical issue is the absolute lack of inclusion of the General Assembly in this process. The concept that we should rubber stamp a tax hike without debate or amendments, and do it right now or else, is a slap in the face of our democratic process. I have requested that Governor Beebe delay the call for a special session until his tax hike proposal has been submitted to the Interim Revenue and Taxation Committee and any other committees deemed appropriate by Sen. Critcher and Speaker Petrus. Let these committees have until the end of May to discuss and debate the proposal, and if necessary a special session could be called for early June.”

Republican Party of Arkansas Chairman Dennis Milligan also weighed in on the proposed settlement:

“I commend Minority Leader Key and both the Republican and Democratic members of the Arkansas legislature who are diligently working to keep taxes low and our economy growing. With Arkansas’ unemployment rate at 5.6%, higher than the national average, it is critical that we take steps to ensure that we grow our job base here and protect our economic interests. These jobs won’t come to Arkansas if we drive the gas companies out, which we risk by increasing the severance tax. I see this as an opportunistic tax, and I think as Arkansans, we should not stand for it.”

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