Oil, gas taxes up in the air

COLUMBUS

Will state lawmakers be in a position in a few weeks to recommend an increase in taxes on oil and gas produced via horizontal hydraulic fracturing, as they vowed back in June that they would be?

Who knows.

You’ll recall that Gov. John Kasich initially proposed a severance tax increase more than three years ago, saying out-of-state producers shouldn’t be allowed to take Ohio’s precious natural resources without paying a little more for the privilege.

You’ll also recall that lawmakers have been balking at that suggestion ever since, pulling it from Kasich’s mid-biennium budget reviews and biennial budget bills, with little indication that the different sides were working toward a meaningful compromise.

You should, at this point, be able to recite the major talking points of the two sides of this debate.

Because supporters continue to say Ohio’s severance tax rate is among the lowest in the country, increasing it won’t stifle production, and absent lawmaker action some other group might push a ballot issue calling for even higher rates.

And opponents continue to counter that producers, faced with a higher tax, will take their business elsewhere, particularly given the current state of oil prices.

Perhaps you were hopeful when, back in June, House Speaker Cliff Rosenberger, R-Clarksvlille, and Senate President Keith Faber, R-Celina, announced proponents and opponents of the severance-tax hike were getting closer to a compromise on the issue.

October announcement

They weren’t close enough to include it in the budget bill, but they would work through the summer and be ready come Oct. 1 to announce a final plan.

“Make no mistake, there’s going to be a solution to this problem,” Faber said at the time. “And lest one side think that they can drag it out ... that’s not an option, because there will be a solution. ... The goal is to negotiate and find something that works for everybody.”

Rosenberger added, “We’re going to restart the clock. We have a goal in mind that we’re going to look at. But the most important thing is, instead of the House negotiating over here, the Senate negotiating over here and the administration negotiating over here and the industry also trying to negotiate with all of us, we’re saying let’s all go to the same table, get on the same page.”

And here we are, a few weeks before the aforementioned deadline, and not much has been shared publicly about the behind-the-scenes back and forth on the severance tax.

I asked Sen. Bob Peterson, R-Washington Court House, chairman of the Senate’s Ways and Means Committee, who has been involved in the talks, for an update last week. I also put that question to Faber and Rosenberger.

The main message I heard back: There will be a report next month, as promised.

“We’ve been having some great discussions,” Peterson said, noting regular meetings in recent weeks. “... We’ve been able to do some deep dives on a variety of issues. ... We certainly have more information. We’re building a base of knowledge. We’ll see what the future holds. ... We are going to have a report in early October.”

So, if you’re keeping track, lawmakers continue to work on the issue, there isn’t an agreement yet, and there probably will be some type of report next month.

Where things go from there is anyone’s guess.

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