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Government


Conservatives split on oil and gas tax
Kasich signs 17 bills, but oil and gas tax tweak isn't one of them
by WKSU's STATEHOUSE BUREAU CHIEF KAREN KASLER


Reporter
Karen Kasler
 
In The Region:
Among the 17 bills the governor signed this week was a package changes and tweaks to laws on a variety of taxes in Ohio. But that law it doesn’t include Gov. Kasich’s proposed tax on oil and natural gas drillers. Statehouse correspondent Karen Kasler has an update on the status of that tax.
Conservatives split on oil and gas tax

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Gov. John Kasich is pursuing his severance tax proposal on oil and natural gas drillers, which he hopes would raise a billion dollars over the next four years that he wants to use to fund the income tax cut that he’s long talked about. But when I asked him specifically about it last month, he suggested it was just one of many items on his agenda. 
“Kasich: Oh, we’re working all the time – 
(Kasler: On the severance tax?) 
Kasich: On everything. Working on a new budget, working on tax reform, we’re still working on education, tons of stuff to do on higher ed. A lot of stuff going on.”

Republican lawmakers had pulled the severance tax proposal out of Kasich’s big budget update, most of which they passed with few changes. Conservative Republican Rep. Lynn Wachtmann is a longtime lawmaker from northwest Ohio. 
“I was not for the governor’s plan because House Republicans had not had time to really study what his proposal was going to do because – at least speaking for myself – this investment that we’re seeing in Ohio is huge.”

Now Wachtmann says a group of lawmakers is working on a compromise that he says will make the governor happy and satisfy GOP legislators’ concerns. 
“What I want is a very direct connection between any severance tax revenues and that income tax. I don’t want, as legislatures have done in the past, today’s work and tomorrow’s promise. I want today’s work and today’s promise.”

But the severance tax proposal has split fiscal conservatives on the national level. The group Americans for Tax Reform and its founder, Grover Norquist, are apparently ok with the tax, according to what state budget director Tim Keen told a House committee in March. 
“There have been representatives of the administratiProxy-Connection: keep-alive Cache-Control: max-age=0 that have touched base with that group and it is my understanding that, particularly with regard to the personal income tax reduction proposal, that they believe it does comply with that, with that pledge.

But this week, the tax proposal came under fire from the anti-tax coalition the National Taxpayers Union, which called the severance tax plan a “damaging” and “punitive” energy tax hike. Matt Mayer is the former president of the conservative think tank the Buckeye Institute, and he thinks the National Taxpayers Union is right. 
“They looked at the proposal. They talked to some small business energy entrepreneurs, and came to the conclusion that this tax is going to hurt Ohio. You know, this election year gimmick to be able to kind of spread the wealth around Ohio with a little income tax cut paid for on the backs of Ohio’s Appalachia small business entrepreneurs is just a bad idea.”

Mayer says the increased economic activity spurred by the drilling industry will help communities, and that an increased tax on drillers will hurt small businesses.  The Kasich administration has touted support of the tax by local chambers of commerce and the Ohio Business Roundtable. Meanwhile, Democrats have said the severance tax and the income tax cut it would fund are too low, and that local governments would still be saddled with bills from damage to infrast

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