Firm deadline fracked

COLUMBUS

Stop me if you’ve heard this before.

Back in June, Republican Senate President Keith Faber and Republican House Speaker Cliff Rosenberger announced an agreement on the touchy severance-tax issue that has been under debate several years.

“We have made substantial progress in the past two weeks,” Faber said at the time, noting that lawmakers, industry groups and Gov. John Kasich were close to a compromise on tax changes that would affect oil and gas produced via hydraulic fracturing.

The timing was notable, because it came days before lawmakers finalized the biennial state budget, and many expected a severance- tax increase to appear in the two-year spending plan.

“We’ve reached a point where concepts and ideas are actually being drafted into legislation,” Faber said.

DISAGREEMENT

But the sides still weren’t in complete agreement, so instead of adding severance- tax language to the budget, lawmakers opted to launch a new study with a report required by Oct. 1.

“Clearly, if we’re talking about a severance tax, we’re increasing it from the current rate,” Rosenberger said.

Faber noted, “The deadline’s a hard deadline. There was a lot of discussion about whether this was just a stalling tactic. ... Make no mistake: There’s going to be a solution to this problem, and lest one side think that they can drag it out or extend the ball, that’s not an option. ...”

There was some acknowledgement at the time that the final plan likely would include a tax-rate increase.

That was back in late June. Where do things stand now? There could be a report issued any day now, but as of Oct. 1, there was none.

“The severance-working group is diligently working on its draft report,” Sen. Bob Peterson, who’s been spearheading the discussions, said in a statement on the deadline day.

“Changing market conditions within the oil and gas industry provided an extra challenge, and we believe it is far more important to get it right than to meet a calendar guideline. We’ve made significant progress and remain confident a long-term solution can be found that can address market conditions and the future of the industry in Ohio.”

Brad Miller, a spokesman for Rosenberger, added in a released statement, “Conversations regarding future action on Ohio’s severance tax have been ongoing throughout the summer, and we believe that the panel is very close to issuing a report of findings. Addressing the severance tax is a substantial undertaking that requires input from all sides of the issue.”

IMPATIENT KASICH?

Kasich, who has been pushing for a severance-tax increase for some time now, was polite about the situation earlier this summer.

There are indications his patience is wearing thin.

“Oil and gas productivity in our state continues to break records, yet our outdated tax system hasn’t kept up,” Joe Andrews, the governor’s spokesman, said in a released statement.

“The governor remains committed to making sure that these companies pay a fair share of the profits they reap by tapping Ohio’s new-found oil and gas resources so that we can continue to cut the income tax for all Ohioans and invest in communities. We stand by willing and ready to help lawmakers get this done.”

Again, stop me if you’ve heard this before.

Marc Kovac is The Vindicator’s Statehouse. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.