Severance tax could aid roads

Arkansas is selling its citizens' birthright for a pittance.

Severance taxes repay the state for removing finite resources. Once drilled, natural gas and oil are removed from the grasp of all future generations. In other words, Arkansas is selling our grandchildren's and great-grandchildren's future for very little money.

The Natural State's rate is far, far below rates of its neighbors.

All recent attempts to raise the severance tax have failed, but Gov. Mike Beebe's plan should work. He's expected to present a proposed hike to the General Assembly in 2009. He concedes it could fail, but, if so, Beebe hopes the measure will be placed on the 2010 general election ballot.

Beebe's carrot will be raising millions annually for state highways. A coalition of the trucking industry, building contractors and local governments is expected to support the proposal.

The governor should be able to push it through, just as Gov. Mike Huckabee hammered the highway bond issue through a few years ago. Highways are dear to many people's heart.

The Natural State collected $619,417 in natural gas severance revenue in the past fiscal year. However, that's less than 1 percent of what would have been raised if Arkansas had the same rate as its progressive neighbors, Mississippi and Oklahoma. Those two states' severance taxes are in the range of Texas' and Tennessee's.

Louisiana's severance tax is a bit lower than other neighbors. Arkansas' tax raised some 1.5 percent of what Louisiana's rate would have raised.

If Arkansas adopts Texas' severance rate, it would raise $99.3 million annually at current gas production levels. That's a fraction of the estimated $19 billion needed for Arkansas highways over the next two decades, but will still be a huge chunk.

With bridges and roads needing upgrades across the Natural State, all revenue possibilities must be considered. When non-replenishable resources are gone, they are gone forever. It's crucial to receive a fair amount for its gas and oil.