Sunday, June 22, 2008

Energy-Producing Parishes Could Become Flush

Posted By on Sun, Jun 22, 2008 at 5:53 AM

By: Jeremy Alford

Voters may soon decide whether the state should triple the amount of money each parish receives for producing oil and natural gas.

According to the Louisiana Constitution, energy-producing parishes can keep 20 percent of the severance taxes they generate from oil and gas production, with an annual cap of $850,000. A proposed constitutional amendment by Rep. Rick Gallot, D-Ruston, would raise the cap to $2.85 million. House Bill 420 stipulates that at least half of the increase must be directed to transportation needs. Because the bill is a constitutional amendment, it will require voter approval but not gubernatorial approval, which is fortunate for Gallot. Republican Gov. Bobby Jindal promised lawmakers earlier in the session that he would veto any bill that dedicates state tax dollars in any new way. According to an analysis by the Legislative Fiscal Office, the constitutional amendment could mean a combined boost of $47 million a year for 30 parishes — but only the top 18 producers are likely to see the full benefit. The proposed constitutional amendment is scheduled to appear on the Nov. 4 ballot. If approved by voters, it would take effect July 1, 2009.

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