Monday, January 20, 2014

Critics of Ohio Severance Tax Proposal Say it Could Prove Costly for the State

From the Toledo Blade:
An industry-backed proposal to raise the tax on shale oil and natural gas drilling in Ohio while providing for other industry tax breaks could actually drain resources from the state, critics argued Wednesday.
Expected new revenue from the higher tax is uncertain, particularly since it would be partially offset by other breaks, raising doubt enough would be available to cover the costs of regulating the burgeoning industry and capping abandoned wells.
“This is a costly bill for the state,” said Wendy Patton, senior project director for the left-leaning Policy Matters Ohio. “That’s one reason the severance tax rates need to be higher than the 1 percent of House Bill 375. ... We’ve got a subsidy for the oil and gas industry that’s really quite large.”
She dismissed suggestions from the industry that drillers would be less likely to take risks in Ohio if the state raises the severance tax beyond what is proposed in its bill.
Read the entire story here.

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