Kasich still hopeful that tax-reform plan will be approved

By Marc Kovac



Gov. John Kasich remains hopeful of convincing lawmakers to adopt his plan to increase taxes on horizontal hydraulic fracturing while cutting income taxes by a corresponding amount.

But he told reporters last week he’s going to be patient as he waits for members of the Ohio House and Senate to fully grasp his tax-reform proposal.

“This is not the time for me to beat a war drum,” the governor said. “I want to give people a chance to understand all the facts, all the figures, and come to the right conclusion.”

He added, “It doesn’t have to be totally my way. They may have some other ideas that make sense or some things that we can tweak. I’m all in favor of that.”

Kasich’s comments came after a couple of weeks of hearings in the Ohio House and Senate on provisions outlined in his midbiennium budget, a lengthy corrections bill being offered midway through the current two-year budget cycle.

The legislation includes a consolidation of some state programs, the implementation of a comprehensive state energy policy, and improvements to the state’s work-force training initiatives.

One of the hallmarks of the package was an increase in tax rates on oil and gas produced through fracking — extracting fuels from deep underground shale formation by pumping in large volumes of water, chemicals and sand.

The industry is expected to add billions of dollars into the state economy in years to come, and Kasich wants to increase severance taxes on fracking production and use the proceeds to implement a corresponding decrease in the state’s income tax rates.

The governor said the changes are needed to ensure some economic benefit for Ohio from big profits expected by out-of-state energy companies. The proposed rates, he said, still would be lower than those in other states.

But some Republicans in the Ohio House question the plan. They pulled related sections from the larger budget bill, saying they would consider them in separate legislation at a later date.

Kasich went on the offensive as soon as that decision was made public, saying he would fight to ensure his plan moved forward.

He struck a more conciliatory tone, however.

“This is a time for me to be patient as they [legislators] work their way through this issue,” he said. “I made it clear to them that this is really important to the state of Ohio.”

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