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Chamber Opposes Natural Gas Severance Tax Act

Posted on March 14, 2012

Originally published in The El Dorado News-Times on March 15, 2012.

By Kevin Sims

During its meeting Wednesday, the El Dorado Chamber of Commerce approved a resolution to oppose the passage of the Natural Gas Severance Tax Act of 2012.

Chamber President and CEO Henry Florsheim said all the resolution does is state that the El Dorado Chamber of Commerce will publicly oppose the passage of the severance tax.

“This could be the biggest thing to hit South Arkansas since oil was first discovered,? Florsheim said. “It just makes sense the leading business organization in Union County come out and oppose it.?

The resolution states that the natural gas industry has created thousands of jobs that pay significantly higher salaries than the state average. The development of the gas industry has had a tremendous impact on the economy of Arkansas in recent years and the natural gas severance tax rate in Arkansas was increased dramatically in 2008, with those tax collections up 4,000 percent.

Arkansas? current natural gas severance tax rate is comparable to those of surrounding states and the increase in the development of shale formation across the country creates a competitive environment for exploration resources.

The proposed Natural Gas Severance Tax Act of 2012 would take hundreds of millions of dollars out of the local economies of natural gas producing counties and communities. This proposed 7 percent flat severance tax would be among the highest in the country and would threaten Arkansas? ability to compete for natural gas drilling capital followed by the resulting job and economic atmosphere impacts.

The chamber also approved the strategic plan for 2012. During the February meeting, the chamber discussed the top priorities of the strategic plan and the board designated them as economic development funding, leadership, business development, marketing and recruitment and education.

In other business:

? Florsheim said the state released the 2010 employment figures Monday.

Union County unemployment ended up at 8.9 percent, coming down 3.5 percent in two years.

“The number of people who are working in the county has gone up, so when you put those two things together, it paints a pretty good picture,? he said.

Sales tax collections went up 4.5 percent, which he said will give the city more money to spend on infrastructure and allocate toward projects.

He said in January, El Dorado?s A&P hotel tax collections were up 27 percent from last year.

? Florsheim discussed the success of the chamber?s new website, saying since launch 16,000 people have visited the website with 11,000 unique visitors. He also said 38 percent of those visitors were from Union County, 57 percent were from Arkansas, 14 percent in Texas, and the rest coming from Louisiana, Ohio and California, with 2.5 percent coming from outside of the country. The site has received more than 88,000 page views, and outside of the home page, the job?s page was the most viewed, according to Florsheim.

? The Arkansas Highway Commission will hold a public meeting at 9 a.m. Tuesday at the El Dorado Conference Center. Florsheim said the AHC never meets anywhere other than in Little Rock, so this is a very rare occurrence. The City of El Dorado was also asked to make a presentation at the end of the meeting to show the state of the roads in Union County to the commission.

? Bill Luther gave figures from the Union County Career Fair, saying 220 job seekers attended with over 30 businesses participating.

Key dates were also discussed at the meeting:

? Business After Hours will be Tuesday, March 20, at the South Arkansas Arts Center

? The South Arkansas Networking Luncheon will be at noon Tuesday, March 27, at the El Dorado Golf and Country Club.

? Leadership Union County will meet on Wednesday, March 28, and will focus on quality of life.

? The chamber?s annual banquet will be held Thursday, March 29, at the El Dorado Conference Center with guest speaker Grant Tennille, executive director of the Arkansas Economic Development Commission. A reception will be held at 6 p.m,. and the program will  start at 7 p.m.

? The “Gone In 60 Seconds? elevator pitch contest will be held Thursday, April 19, in the Rialto theater. The top presentation will receive prize money and an opportunity to present a 10-minute presentation to a group of investors later on in the month.

? The Administrative Professionals Luncheon will be held Wednesday, April 25.