The campaign to raise the natural gas severance tax has come up with its own analysis to counter recent studies funded by the Arkansas State Chamber of Commerce and Conway Chamber of Commerce on the positive impact of gas drilling in Arknasas.
Sheffield Nelson, who’s leading the tax campaign, commissioned Dr. Charles Venus, who’s been a member of the Governor’s Council of Economic Advisors and a tax advisor to Govs. Rockefeller and Bumpers, to do an analysis on the impact of the gas severance tax. Nelson is leading the a petition drive for a ballot measure to increase the severance tax to 7 percent. It’s now capped at 5 percent, but can be much lower depending on the type of well that produces the gas.
Venus agreed to do the study for expenses only, about $3,000, which he primarily passed along to researchers. The University of Arkansas was paid $47,900 by the State Chamber for a report it did on the impact of gas exploration in Arkansas. The Conway Chamber of Commerce hasn’t said what it paid for a Texas researcher’s report on the impact of a tax increase.
Venus found that the economic impact of a 7 percent severance tax (either a 2 or 5.5 percent increase, depending on if you go with the limit on the books or what the average gas company actually pays), will raise Arkansas’s gas revenue from 2011’s $55.5 million to $209 million annually, about as much as major explorer Exxon Mobil makes worldwide in a day. Venus said the impact would be positive because the money would go to highway construction. It would create 6,200 direct highway jobs and 9,300 indirect and induced jobs. Nor should Arkansans’s gas bills increase, since our residential gas comes largely from Oklahoma and Louisiana.