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Kasich pitch to farmers: Back my plan
By Marc Kovac
COLUMBUS
Gov. John Kasich urged support from the state’s agriculture community Friday for his proposal to increase taxes on fracked oil and gas while decreasing income tax rates for other Ohioans.
The governor, backed by the current director of agriculture and a former director of that office, said he was “disappointed” that the state’s largest farm-related group has not endorsed his proposal.
“I’m told that there’s growing support on the board of the Farm Bureau,” Kasich told reporters during a press conference in his ceremonial office at the Statehouse. “It isn’t right that a farmer ... theoretically could be paying more taxes than Exxon Mobil in Ohio and taking the low taxes out and giving it to their shareholders who live in Switzerland.”
He added, “When people realize what this plan is, which is out-of-state oil companies pay more and all Ohioans pay less and it improves our business environment, that’s a fantastic story. And that’s why I know this is ultimately going to become law.”
But a Farm Bureau spokesman said the organization has not yet taken a stance on the severance tax plan, and it wasn’t clear that the members would opt to adopt a policy position anytime soon. The group solidifies such stances during its annual meeting in December.
“We’re studying it,” said Joe Cornely, noting discussions among members are ongoing. “We have heard from the governor. We’ve heard from representatives of the oil and gas industry. We have a pretty good understanding of where both of them stand. ... Whether or not we actually put it into the official policy process, that will largely depend on what the members tell us they want.”
The governor for months has been seeking lawmaker support to increase tax rates on oil and gas produced through fracking, an emerging means of 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 has said the changes are needed to ensure some economic benefit for Ohio from big profits expected by out-of-state energy companies.
But some Republicans in the Ohio House are questioning the plan. They pulled related sections from a larger budget bill, saying they would consider them in separate legislation at a later date. They recessed for the summer without acting on the proposal and likely won’t pick it up again until after the November election, at the earliest.
Statehouse Democrats favor increasing the oil and gas tax rates, but they want the resulting collections to be used to help local governments and school districts.
Industry representatives oppose the plan, saying a tax hike could stifle growth and hurt farmers and other landowners.
“When the governor discusses a severance-tax increase, he often paints a picture of it applying only to big, out-of-state companies that appear to be cashing in on Ohio’s mineral riches,” Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association, said in a released statement.
“In fact, hundreds of homegrown Ohio-based energy producers and hundreds of thousands of Ohio landowners, in most cases farmers in economically depressed areas, will be burdened with a huge tax bill if the governor’s proposal comes to fruition.”