March 29, 08

Letter to Editor:


Through the severance tax, Arkansas could bring a little tax relief to families who are in desperate economic conditions.  With $4.00 gas on the horizon; food prices escalating daily on basics like milk, bread, eggs, and flour; the housing foreclosures; and the ominous economic problems facing our country, our families need tax relief  more than ever. 


Governor Beebe says he has 32 votes in the 35-member Senate and 81 votes in the 100-member House to vote for the severance tax on natural gas (a tax which tax experts SAY won't be passed on to consumers) in the Special Session beginning March 31st.  Instead of  providing any tax relief for the citizens, the Governor wants the new $100 million annual severance tax to go for roads and the general fund even though the government has  $127 million more than they estimated they would this year alone.  What good are roads if you don't have food on the table or gas to travel?


According to a U of A study, "Over the next five years, the Fayetteville Shale play could have an overall economic impact on Arkansas of $17.9 billion." This economic impact will mean increased fuel tax revenues, increased sales tax revenues, increased income tax revenues, increased property tax revenues, and $1.8 billion in new taxes to the state. 1

The increase in sales and income taxes would build the roads without the new severance tax.


If there was ever a time for tax relief in the form of  eliminating the tax on groceries as Beebe promised he would when the budget permitted, or for income tax or sales tax reduction, this is it.  According to the Federation of Tax Administrators, Arkansas ranked 4th  in the nation in state and local tax burden as a percentage of income in 2005.   


Why not call your legislators and ask them to vote NO on the severance tax unless the proceeds are used to relieve some other tax burden in Arkansas. We would only have to change the minds of six or seven representatives to make this happen. Republicans say they want lower taxes; ask them to prove it.




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Debbie Pelley

2209 Indian Trails

Jonesboro, Arkansas 72401

870-935-9438 Cell 870-919-1057