What's a windfall? | Arkansas Blog

What's a windfall?



Gas royalty owners are worked up about Sheffield Nelson's proposal to raise the gas severance tax. The letter I have on the jump fires back sharply at Nelson. He undoubtedly expected to receive such as this, given his history in the gas business. But turnabout is fair play.

That said, the royalty owners ARE reaping a windfall and it IS an exaggerated windfall because of the criminally low severance tax in Arkansas.


Today's Arkansas Democrat Gazette has an article on the severance tax issue.  Nelson's proposal would raise the tax to 7%.  He stated that royalty owners..."have had a windfall....and they are getting paid "simply because they own mineral rights."  In other words they didn't deserve to be paid for it.
What hogwash!  When the housing market was booming did the government lay extra taxes on that industry segment because they were making money??  Substitute farm equipment, car dealership, etc.  Put in any scenario you want to choose.  When those entities had "boom years" were their taxes raised because their segment of the economy was healthy?  Why single out royalty owners in Arkansas as a means to produce state revenue.
I worked for a State regulatory agency for 32 years.  Enough to know about "special interest" language.  When this matter comes up in front of the Legislature your can be sure that you will hear from royalty owners.  Many of them belong to the National Association of Royalty Owners (NARO) right now.  I expect that many more will join because of this issue alone.

Windfall.  Baloney!  I'll quote Dwight Brown, President of the Arkansas Capter of the National Association of Royalty Owners on the subject.  " Let me tell you what a windfall is.  A windfall is when you are named an executive for Arkla gas by marrying well. A windfall is when you sell Arkla assets to Jerry Jones (Arkoma Gas) for a few million, loan Jerry millions to drill wells, then after Sheffield left Arkla they paid 10 times what Arkoma paid for those reserves. That's a windfall."
Nancy Dunlap
VP, Arkansas Chapter
National Association of Royalty Owners

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