Arkansas Gov. Mike Beebe has proposed raising the severance tax on natural gas production to pay for highway improvements in the state.

The rate would be 5 percent with a few exceptions.

A severance tax is a levy on non-renewable resources such as natural gas. Right now, the Arkansas severance tax is among the lowest in the nation. Far lower than those of Texas and Oklahoma. The rate of three-tenths of 1 cent per 1,000 cubic feet of gas has been in effect since 1957 and only raises about $600,000 a year.

The 5 percent proposed rate could bring in about $57 m...

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