Beebe Formally Signs Tax Increase into Law - KAIT Jonesboro, AR - Region 8 News, weather, sports

Little Rock, AR

Beebe Formally Signs Tax Increase into Law

LITTLE ROCK, AR - Governor Beebe has signed a bill to raise the state's severance tax on natural gas.  He put his signature on the tax hike only hours after Arkansas legislators gave their final approval in a special session that he called.

Beebe pushed for the tax increase to raise money for road improvements.  He expects it to eventually generate $100 million annually.  The tax goes into effect January 1 and updates a levy that was among the lowest in the country and had not been changed since 1957.

Beebe asked for the increase after negotiating an agreement with natural gas companies that in recent years have been drilling heavily in the Fayetteville Shale.

The legislation passed in the third day of the special session.  It calls for the state to levy a five percent base rate on the market value of gas extracted, with exemptions built in to lower the tax rate for certain wells.

The Legislature also dispensed with the only other two items on its agenda, repealing a 2007 law that mistakenly allowed children to marry with parental consent and another measure to allow two school districts more time to seek release from federal court supervision of their desegregation efforts.

(Copyright 2008 by The Associated Press.  All Rights Reserved.)

Powered by Frankly