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Gov. Kasich's severance tax proposal brings unlikely supporters
Liberal group supports the plan but gas industry says it will hurt the economy

Andy Chow
The Ohio Oil and Gas Association says the proposed severance tax will hurt the fracking industry.
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House leaders are looking over Gov. John Kasich’s budget proposal which includes a tax increase on oil and gas drilling. And, as Statehouse correspondent Andy Chow reports, the governor is getting some support from an unlikely source.


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The liberal-leaning research group Policy Matters Ohio says they are encouraged by Gov. John Kasich’s proposed severance tax rate of 6.5 percent.

The group’s Wendy Patton. who has not been on board with the governor’s proposals in the past, says this is a “self-respecting” rate.

“He recognizes the value of the commodity that we have just as industry is recognizing that value and he is proposing a severance tax rate that is within the range of those of major producing states,” Patton says.

Shawn Bennett with the Ohio Oil and Gas Association says the industry is already hurting because of a drop in prices. He claims a higher tax rate will further discourage investment.

“As prices decrease and taxes increase you shrink the amount of economics that are available in the play so you’re taking what was once 3,800 square miles and maybe shrinking it down to 15 because it all depends on what the economics of that well is going to be,” Bennett says.

Bennett adds that the revenue directed back to local communities will not outweigh the benefits those towns would reap with continued investment. 

Patton remains concerned about where the estimated $325 million in revenue would go. She would like more of it directed back to local communities. Right now that number’s set at 20 percent. 

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