Who can ever again underestimate Gov. Mike Beebe, who continues to reach every goal he sets? Beebe yesterday called a special session of the legislature for March 31 to enact a severance tax on natural gas. He called it because he had lined up every vote he needed in both legislative houses to pass the law in the minimum three days that are required to enact a law.
That is not a miracle, but it is extraordinary. The state’s nearly invisible severance tax on gas has been raised only once in the 60 years since it was put on the books after World War II. That increase was a decade later when the legislature raised it slightly more than a penny on every 10,000 cubic feet of gas. Every governor since then has recognized the embarrassment of being the only state in America that gave away a vanishing natural resource without recouping much of anything for the public domain. Gov. Bill Clinton, at the peak of his command, could not get the three-fourths vote in both houses to raise the tax to fuel education reform.
Beebe’s legendary prowess as a vote-getter, compromiser and dealmaker, developed over more than two decades in the state Senate, only partly accounts for his success. He chooses his fights carefully. This is one where he held all the cards of logic. The tax — 5 percent of the market value of gas — will not affect Arkansas consumers. No one’s heating and air-conditioning bills will be affected. The big producers who will remit the taxes, who are headquartered mainly in Texas and Oklahoma, agreed that the tax was reasonable and that it would not depress development of the vast, rich Fayetteville shale in Arkansas.
But the decisive political wisdom was Beebe’s choice of highways, roads and streets as the primary beneficiary of the tax. Legislators have no history of turning down taxes dedicated to highways, even when the taxes are imposed directly on consumers. Highways are politically irresistible.
Arkansas’ small band of Republicans in the legislature could block the tax, as the party leadership wants, but they will not. The bloc of eight in the Senate, along with Democratic leader Bob Johnson, who votes for the special interests even when they don’t ask him to, could stop the tax. But at least half of them told Beebe they would support him.
Republican leaders, steamed that the party had lost its low-tax patina under Gov. Mike Huckabee, who raised nearly every tax on the books, hoped its lawmakers would stand united against a tax, even if the tax made perfect sense, to make the point that Republicans were just flatly against taxes.
If the tax and the road and street work become as popular as we think they will be, the Republicans may want to reverse course and claim credit. Their few votes will have been critical in passing it, and the father of the tax has to be Sheffield Nelson, the former Republican chairman and standard-bearer whose initiative proposal for a 7 percent tax forced Beebe’s hand and gave him the leverage to reach a deal with producers.
—Ernie Dumas
