Governor's Tax Revisions Held Up by Ohio House

For Governor John Kasich, the struggle on his new bill is beginning.

Kasich has proposed massive changes to the Ohio tax code, and the Canton Repository reports that the Ohio House has delayed the bill in order to review it more closely.  The governor has expressed his disappointment with their decision.

Ohio House Finance Chairman Ron Amstutz has indicated that the representatives simply need more time to review the implications of the proposed changes.  "Given the size of this set of recommendations, we are beginning an 'all hands on deck' process to give full attention to the necessary work ahead of us," Amstutz said.  More after the jump...

That doesn't necessarily mean that the bill is delayed because of overwhelming opposition.  "My initial sense is that many of the provisions of this legislation make sense and will result in improvements for our citizens," Amstutz continued.

The proposed changes, as we've mentioned before on The Daily Digger, call for a 4 percent increase in taxes on oil and gas companies, which would then translate into income tax reductions for state residents.  The income tax cut would be based off of the money brought in from the additional tax, could drop by as much as 5 percent by 2016 if administration estimates are accurate.

Amstutz expressed what I would term "cautious support" of that portion of the bill.  "This aspect of the proposal touches on a high priority for our caucus:  making Ohio's tax burden as equitable and competitive as possible.  However, the more the members of our caucus have learned about this particular proposal, the more concerned I've become that there are key questions that cannot be sufficiently answered and resolved within the available legislative time frame - especially in light of all the other legislative work on our plate," he said.

Kasich, meanwhile, accused special interests of lobbying lawmakers to stop the proposed changes and vowed to keep fighting to push them through.  The oil and gas industry has expressed its displeasure with the new tax plan, warning (threatening?) that it could likely lead to less investment in the state.

Governor Kasich dismissed such statements.  "Why is it that every other state has a higher severance tax than we have, and why is it that Chesapeake and MarkWest just announced an almost $1.5 billion investment in the state?" he asked.

Kasich says he had told energy companies that increased taxes were coming all through the shale development, so ideas of them backing out of the state now aren't sensible.  "That's a point of view that really has no credibility.  It's a silly argument, and there's no relation to reality," the governor said.  (DD Note:  I agree - there may be a little less money coming in if the tax increases, but it's very hard to believe that the energy companies are just going to thumb their noses at the gobs of money they can still make in Ohio.)

Going on, Kasich notes that public sentiment should swing his way when people realize that oil and gas drillers are paying 20 cents for a barrel of oil.

The severance-income tax portion of this bill will be moved to a separate bill and considered by the House again at a later date.  The rest of Kasich's plan will be looked at in the House on Tuesday.

Well, what do you think?  Are these tax breaks going to happen or not?  Are they a good idea or not?  Talk about it in the dedicated thread at The Daily Digger Forum!

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