‘Vote YES on CA No. 4’
By Ken Grissom
Barack Obama is not the only politician who wants to redistribute the wealth.
Parish President Guy Cormier has been tirelessly going from group to group, pushing a plan to redistribute the state severance tax, the money the state earns off oil and gas pumped out of the ground in Louisiana or its offshore waters.
Cormier is asking folks to vote for Constitutional Amendment No. 4 on the Nov. 4 ballot. Passage of the amendment would put an extra $3 million into the parish coffers over two years.
It would also create a continued source of funding for the Atchafalaya Basin Program, which reaches the end of its federal allocation in 2014.
Like all taxes, the severance tax is complicated, but basically it is a tax of 12.5 percent on the value of crude oil and a straight 28.8 cents for every 1,000 cubic feet of natural gas produced.
The Constitution of 1921 requires the state to give parishes 20 percent of the revenues derived from production in the parish. But a cap of $850,000 a year effectively brings the share gotten by parishes down to 4 percent.
Back in the 1920s, oil was a dollar a barrel while earlier this year it had soared to over $100 a barrel, and we all know what’s happened to natural gas prices.
The solution – what the amendment would do – is to raise the cap by $1 million effective July 1, 2009, and by another million on July 1, 2010. Subsequent raises would be tied to the Consumer Price Index.
The proposed amendment also requires the parish to spend at least 50 percent of the new money on roads or other transportation projects.
Amendment No. 4 would also mandate that half of the severance taxes derived from state-owned lands within the levees of the Atchafalaya Basin be deposited in a fund for the Basin, and that 85 percent of those funds be used for projects improving water quality or management and access, such as boat ramps. The other 15 percent must be used for other projects in accordance with the mission statement of the state master plan.
“My fear is that will look at this amendment on the ballot and all they’ll see is ‘tax’ and ‘increase’ and it is not an increase in tax at all,” said Cormier.
“It’s just a redistribution of a tax that’s already being levied.”