Ohio leaders: No severance-tax increase on oil and gas
By Marc Kovac
Ohio’s legislative leaders said they won’t increase taxes on oil and gas produced via horizontal hydraulic fracturing, or fracking, while oil prices remain low.
“Until market conditions improve, it’s something that we should stay away from,” said House Speaker Cliff Rosenberger, R-Clarksville, paraphrasing a study released by lawmakers last year on the subject.
“I’ll just be pointed: North Dakota and Oklahoma are two great states to point out. I’ve talked to the legislative leaders in both states. North Dakota’s decreasing their severance tax. ... And Oklahoma is having huge issues with the fact that they’ve tied their severance tax to [the state general revenue fund], and now [they’re] facing a structural imbalance.”
Rosenberger and others offered comments on the severance-tax issue during an Ohio Associated Press forum Thursday in Columbus.
The severance-tax increase has been a point of contention between Republican legislative leaders and Gov. John Kasich, who has pushed for an increase in rates for several sessions.
The governor reiterated his support for an increase in December, saying an outside group could opt to place an even larger rate increase before voters.
But Rosenberger and Senate President Keith Faber, R-Celina, said now is not the time to raise rates, with Ohio’s fracking industry facing a downturn due to declining oil and natural-gas prices.
Minority leaders in the general assembly agreed with the majority position but said the issue should be reopened when energy prices rebound.
Senate Minority Leader Joe Schiavoni of Boardman, D-33rd, said his district has been hit hard by the market downturn.
“At Vallourec [Star], they have half the workers that they had last year,” he said. “This is a big company for the Mahoning Valley. ... Exterran just closed their doors. They just built a facility. We were just at a ribbon-cutting five years ago, where the [Youngstown/Warren Regional] Chamber was talking about this was going to be the future – we were going to have more Exterrans. Now Extrerran’s gone in five years. This is real. We have to be very careful right now.”
Both Republican and Democratic legislative leaders said severance-tax increases should be directed to communities affected by oil and gas production.