Strange, this is what citizens have been saying about the shale boom for years, good thing the governor finally caught on. Taken from Ohio Governor John Kasich’s State of the State speech.
GOVERNOR KASICH: …okay. So we’re talking about not just saving money in government spending, but we’re talking about tax reform. Some things go up, other things go down, but to provide the incentive for the least negative impact on the private economy.
Severance taxes, that’s another place where we need tax reform. The reason is simple. Our current system doesn’t reflect our current reality. Ohio’s severance tax was created decades ago, long before Ohio’s shale boom was ever envisioned. Its current low rate: 20 cents on a barrel of oil.
I don’t know anybody who lives in Ohio who would not like to sign up for this, twenty cents on a barrel of oil. It’s unconscionable as far as I’m concerned. It’s not right. It isn’t fair to Ohioans, because these resources are being depleted. They’re never coming back. Ohio’s being made poorer as a result of the depletion of our resources. It’s like oil and gas itself.
Much of the wealth the shale boom is generating is being shipped out of our state, being shipped out of Ohio.
We need to change that while at the same time making sure that Ohio’s long time small drillers—the ones who have been around for years and make very little money. We want to just get rid of their income taxes altogether but we also want to make sure that local governments are supported when their calls for first responders and infrastructure or other essential services are forced to go up because of the oil and gas activity. Okay? All of it.
GOVERNOR KASICH: The prosperity created by our oil and gas deposits can be great not just for shale country. This is not just for part of Ohio but for all of Ohio because it makes possible the income tax cuts that provide an economic boost statewide.
I’m disappointed by those who say the severance tax reform will kill the industry. That’s a joke. That’s a big fat joke because I’ve talked to them in private. And I’ll tell you what, our severance tax will still be competitive with our energy-rich states. And you know what? Let’s reform the severance tax so all Ohioans can have lower income taxes and we all benefit from this whole industry. That’s what it should be all about.