It looks like a severance tax hike for drillers in Ohio won’t happen this year. Yesterday, the Ohio House passed a “sweeping package of spending and policy initiatives” from Ohio Gov. John Kasich. The one thing not among the package? Kasich’s proposal to hike the severance tax for Utica Shale oil and gas drillers.
Kasich wants to hike oil and gas extraction taxes to 4 percent in two or three years. Energy companies swarming the state in search of new natural gas and oil resources in the Marcellus and Utica shale plays would have the option to waive the tax to offset startup costs. Income tax reductions would begin in 2015, and deepen as proceeds rose.
The oil and gas industry opposes the tax increase as a deterrent to industry growth that Kasich is counting on to improve the state’s economy. But the governor has dismissed their concerns, saying they can’t get to the oil and gas unless they come to Ohio.*
The bill now goes to the Ohio Senate for final passage.
*Putnam County Sentinel/AP (Apr 25, 2012) – Ohio House approves budget bill absent tax plan