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Kasich proposes raising Ohio severance tax on oil and gas
 
By CELESTE BAUMGARTNER
Ohio Correspondent

COLUMBUS, Ohio — When Gov. John Kasich spoke at the Ohio Farm Bureau Federation’s annual meeting he ruffled feathers with his comments on raising Ohio’s severance tax. This is a tax on the removal of nonrenewable resources such as crude oil and natural gas. Ohio already has a severance tax. Raising it would allow the state to lower the state’s income tax, the governor said.

“We need to lower Ohio’s income tax; it is too high,” Kasich said. “It really hurts small business. One of the elements you’re going to see in our tax reform plan is an increased severance tax on oil and gas.

“Companies are now paying 20 cents on an $80 or $90 barrel of oil. It’s ridiculous. When we put our increased severance tax in, it will allow us to then reduce the taxes for small businesses and individuals in Ohio.”

In a question-and-answer session following the governor’s comments, Jayne Wallace, Harrison County Farm Bureau president, asked if he was also going to put a severance tax on the windmills in northern Ohio. “I feel if you put a severance tax on our property in the eastern part of Ohio that is now reaping rewards through the gas and oil industry, I feel like we’re being penalized for owning that property that happens to have oil and gas,” Wallace said. “I have paid taxes on it. The entire state is seeing benefits from the oil and gas industry, not just the eastern part of the state.”

The governor replied that a modest increase on the severance tax on Big Oil would allow Ohio to reap some of the benefits on the oil that is coming out of the ground, and it is a diminishing resource. “If you have this on your land and you negotiated a bad deal with the oil companies, and you have to pick up the severance tax – I wouldn’t have done it that way if I were you,” Kasich said.

In other comments, he praised Ohio agriculture, calling it the bedrock in the state. He also commended Ohio Department of Agriculture Director David Daniels and Department of Natural Resources Director James Zehringer for the work they’re doing in keeping fertilizer out of the streams.

“You know that’s a problem, and I’d rather not have a law passed,” Kasich said. “I would rather have cooperation from the ag industry, which we are getting from farmers, to try to make sure that we can have successful agriculture and also a good environment, because no one cares about the environment more than an American or Ohio farmer.”

Later, during policy sessions at the meeting, Ohio farmers voted to oppose an increase in the severance tax solely for the purpose of funding a state income tax reduction. If there is to be an increase, it should address local government funding, infrastructure needs, local and state economic development and mitigation of negative impacts on local communities and environment, they specified.
12/12/2012