Gas-tax foes say lawyer misleading public about plan

Foes of Little Rock lawyer Sheffield Nelson’s proposed ballot measure to increase the severance tax described him Thursday as a bully and accused him of misleading the public about his proposal with more than 300 people standing behind them on the state Capitol steps.

Nelson disputed the allegations and said Randy Zook, chairman of a group opposing Nelson’s measure, doesn’t know what he’s talking about.

The proposed initiated act, if it gets on the ballot and is approved by voters, would set the tax at 7 percent of the market value of gas when it’s extracted from the ground. The existing tax applies to the market value of gas when it is extracted, minus the cost of transportation and treatment. The current rate floats between 1.25 percent and 5 percent.

Nelson said his proposal could raise about $190 million a year to improve roads and highways.

His Committee for a Fair Severance Tax is attempting to collect 62,507 Arkansas registered voters’ signatures on a petition to qualify the measure for the Nov. 6 general election ballot.

On the Capitol steps, Zook, president of the Arkansas State Chamber of Commerce and chairman of Arkansans for Jobs and Affordable Energy, said, “We are convinced that [the proposal] will threaten the existence of hundreds, if not thousands, of jobs across Arkansas.”

The tax proposal will harm the state’s ability to compete with Louisiana, Oklahoma, Texas, North Dakota and Pennsylvania for “further business development of our mineral resources,” Zook said.

Linda Linn of Conway, a royalty owner and vice chairman of Arkansans for Jobs and Affordable Energy, said Nelson “has made it appear that the big out-of-state gas companies are the only ones paying a severance tax and are the only ones who would be affected by a tax increase.”

“Well, that is absolutely not true,” she said.

“A percentage of severance tax is taken out of every royalty owner’s checks,” and the vast majority of royalty owners are average hardworking Arkansans who need money to make ends meet, Linn said.

“And Sheffield Nelson would have you increase the severance tax on these folks to help pay for roads all across Arkansas,” she said.

Lonnie Turner, an Ozark attorney who represents landowners in natural-gas-production areas, added: “Well, we got a bully now, and he’s tried to bribe the cities to go out there and carry these petitions. But he hasn’t got ’em all, because some of them are here today. They know better. They know it is a bad tax.”

Nelson said Zook’s suggestion that the ballot measure will threaten hundreds of jobs “is nothing but bull.”

Zook’s contention that the measure would hinder the state’s ability to compete “is spouting things that are not true.”

Royalty owners wouldn’t pay much more in severance tax under his proposal and “they are making a literal killing,” Nelson said.

Opponents of his measure “are getting these people who look like average people to say it is going to kill them,” Nelson said. He called Thursday’s rally “a paid show.”

Turner’s suggestion that Nelson tried to bribe the cities “is the most absurd thing I have ever heard in my life,” Nelson said. “It is a total falsehood.”