Group renews call for tax increases

March 14, 2012 at 12:00a.m.

COLUMBUS

A statewide coalition formed last year with hopes of persuading Gov. John Kasich to increase taxes to pay for public services renewed that call Tuesday, on the eve of the release of the administration’s mid-biennium budget.

One Ohio Now wants the governor to hike taxes on oil and gas drilling and production, with the proceeds directed to local governments and school districts.

And it wants Kasich and Statehouse Republicans to refrain from cutting the income tax.

“We’ve been making cuts to [income taxes] over the past seven years,” said Gavin DeVore Leonard, state director for One Ohio Now. “We’re in a deeper hole now than when we started.”

One Ohio Now announced its stance on the budget issues during a conference call with reporters Tuesday, the day before Kasich unveiled his mid-biennium budget plan, legislation that is expected to be long on policy proposals.

Specific details will be released during an afternoon press conference near the Statehouse, but Kasich has confirmed that his plan calls for an increase in taxes on horizontal hydraulic fracturing, or fracking, and related activities.

Fracking involves pumping large volumes of water, chemicals and sand into deep underground shale formations to extract oil and gas. Studies estimate the production from such activities will add billions of dollars to Ohio’s economy in coming years.

Kasich’s oil- and gas-tax increase would be balanced by a decrease in income taxes — a move that the governor believes is needed to make the state more attractive to businesses.

“I’m only going to say that I’m really interested in cutting the income tax, for two reasons,” Kasich told last week. “One, it will help 11.5 million Ohioans, and secondly, it will help small-business people, because most small businesses pay that income tax. So as that rate comes down, it makes us even more competitive.”

One Ohio Now supports an increase in oil and gas taxes, Leonard said Tuesday. But the group wants the governor to increase rates even higher.

“While we’re glad to see the governor taking this seriously in terms of raising revenue, we would really like to see a higher rate on that oil and gas drilling,” he said.

The group also opposes any income-tax cut. Leonard said proceeds from increased tax collections should go to local communities affected by increased oil and gas production, plus to local governments and schools affected by budget cuts last year.

“The reality is, we’re shifting the burden of funding human services, funding core education, funding for local government from the state to local governments,” said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio. “What that means is they’re raising property taxes in many parts of the state to make up for it.”

Hearings on Kasich’s mid-biennium budget proposal will begin Thursday in the House finance committee. The Republican-controlled House and Senate expect to pass a final package before their summer break.