Leader Blues

Wednesday, July 11, 2007

EDITORIALS>>Some taxes should go up

Every week brings new announcements of investment in the exploration of the vast Fayetteville shale gas play and, far more quietly, fresh complaints about the horrors that follow it: the waste pits, polluted ground water, the surface degradation and the weak secondary roads and city streets that are pounded into rubble by the heavy equipment.

Economic development nearly always carries some costs, but good government will always ameliorate them by stern regulation and sometimes taxation. Old-timers in south Arkansas remember the years of the oil boom, when a few got rich, others got better-paying jobs and the land and streams took a beating. Creeks and branches turned to saltwater and sludge and valleys took on the ghostly appearance of bombed-out Dresden: long stretches of whitened dead tree trunks and blackened earth that supported only the scrappiest vegetation. The state eventually passed pollution laws and established regulation over discharges, and over many decades a little verdure returned to the valleys in Union, Columbia and Lafayette counties and a little life found its way back into the streams. The legislature passed modest severance taxes on oil that paid for some of the reclamation. Now the oil bonanza is mostly gone.

Lots of personal riches will follow the shale development although the companies that drill and then pipe the gas to Midwestern industries and homes will take most of the profits out of the state as well. Gov. Beebe is hearing the complaints now as well as the euphoria, and he told a radio audience that the exploration companies ought to be paying their share to cover road and environmental damage. But they wonít. Stepped-up enforcement of highway weight limits, which Beebe promised, wonít do the job either. The state Department of Environmental Quality is drafting rules to govern the drilling and cleanup. Presumably, the regulations will include fines for violations. If they follow the Arkansas pattern, they will not be harsh enough to make a lot of difference. The companies tried and almost succeeded this year in passing legislation to limit what property owners who were abandoned by their government could recover by suing heedless developers.

Gov. Beebe, reflecting what we fear is his leadership style, said he sure wished that the state had a real severance tax on natural gas but that he was unwilling to ask the legislature to pass one. It would take a three-fourths vote in each house and that is impossible to achieve, he said. He recalled that Gov. Bill Clinton proposed a modest tax in 1983 and that he, as a state senator, had voted for it but that the House of Representatives defeated it. He implied that Clinton was a more potent leader than he and that at Clintonís pinnacle he could not get a necessary reform done. Beebe suggested that someone draft an initiated act and get it on the ballot. He would support it. Well, somebody should, but what about Mike Beebe? We recall two such instances: Bill Clinton pushing a public initiative for ethics reform after the legislature defeated it and Mike Huckabee organizing an initiative drive for a big health-care program after the lawmakers defeated it. That was leadership.

The severance tax has a moral imperative. Itís not just a way to raise money for public works and reclamation of lands. Those who profit from the removal of a finite public asset that can never be replenished owe something back to the public trust. It is certainly not three-tenths of one penny for a thousand cubic feet, the absurd current law.