The Delta Grassroots Caucus (DGC) is a broad coalition of grassroots leaders in the eight-state Delta region. DGC is also a founding partner of the Economic Equality Caucus,
which advocates for economic equality across the USA.

Delta Caucus Endorses Gov. Beebe's Severance Tax Proposal

Posted on March 13, 2008 at 12:29 PM

The Mississippi Delta Grassroots Caucus endorses Gov. Mike Beebe of Arkansas’ severance tax proposal, which we believe is another example of his statesmanlike leadership for the people of the Arkansas Delta as well as the entire state. The funding from this proposal will largely go to improve the transportation system in Arkansas, and certainly the Delta area of Arkansas is badly in need of improvements in our highways. We would encourage governors in other states to also take actions improving their transportation systems as well.

State Representative Robert Moore, who represents Desha, Chicot and Ashley counties in the Arkansas Delta, is very supportive of Gov. Beebe on this issue, saying, “Improving our transportation system is a key to the Delta’s economic development, and I support Gov. Beebe’s leadership on the severance tax proposal and look forward to getting everybody informed about this very important initiative.”

The Delta Caucus’ key transportation adviser, Johnnie Bolin (from Crossett in southeast Arkansas), executive director of the Arkansas Good Roads Transportation Council, said “We at Arkansas Good Roads Transportation Council feel that Governor Beebe’s proposal regarding the Severance Tax is timely and we applaud his efforts.”

“The Delta Grassroots Caucus has often praised Gov. Beebe and the legislature for pushing through a major increase in education funding, which will be helpful for the Delta and demonstrates the governor’s role as a champion for education, and now we applaud his leadership on the severance tax proposal, which should be very helpful to improvements in the transportation system in the Arkansas Delta and throughout the state,” said Lee Powell, executive director of the Delta Caucus.

Below in this email we would like to include an excellent statement from Gov. Beebe’s office explaining his proposal. For more information, contact Matt DeCample, PHONE: 501-683-6414 or email at

GOVERNOR BEEBE ANNOUNCES AGREEMENT ON NATURAL GAS SEVERANCE TAX Agreement will not impact residential ratepayers

Statement of March 11, 2008 LITTLE ROCK - Governor Mike Beebe announced that he is contacting legislators to determine support for an agreed increase of the severance tax on natural gas in Arkansas. The agreement will create an ongoing roads program for Arkansas without increasing natural-gas rates for residential Arkansas customers. Discussions ended yesterday when representatives of the natural-gas industry agreed to Governor Beebe’s proposal.

Terms of the agreement include:

  • A base rate of 5 percent of gas-sale proceeds received by the producer.

  • A reduced rate of 1.5 percent for the first 36 months of production on high-cost wells. Well owners who have not recovered their costs after 36 months may apply to the Department of Finance and Administration for a possible extension of up to 12 months.

  • A reduced rate of 1.5 percent for the first 24 months of production on other wells.

  • A reduced rate of 1.25 percent for marginal gas wells that do not meet minimum production thresholds.

  • The agreement would take effect on January 1, 2009.

Ninety-five percent of the severance-tax revenue would be dedicated to Arkansas roads, utilizing the current formula of 70 percent to state highways, 15 percent to counties and 15 percent to cities. The other 5 percent would go to general revenue.

By conservative estimates, the new severance-tax rate would generate about $57 million for the State in the first year, increasing each year and reaching the $100 million mark by the year 2013.

Governor Beebe is now discussing the proposal with legislators and gauging their support before deciding whether to call a special session. Beebe has said that he will not call a special session unless enough votes exist to pass the proposal.