Kasich outlines proposal to lower income taxes

Dayton Daily News - March 16, 2012

Lynn Hulsey

KETTERING — Ohio Gov. John Kasich’s proposal to raise taxes on the oil and gas industry and use the money to lower income taxes was met with applause on Thursday when he spoke at the Montgomery County Republican Party’s Lincoln/Reagan Gala dinner fundraiser.

Kasich, in his first opportunity to pitch his tax proposal to crowd of Republicans and business leaders since he announced it on Wednesday, said his “modernization” of the state oil and gas taxes is an opportunity that the state cannot afford to miss.

“Thar’s gold in them thar’ hills in Ohio,” he said.

The eastern portion of the state has oil and gas buried in the Utica and Marcellus shales, resources that drillers want to reach using hydraulic fracturing, or “fracking.” Kasich proposes a 1 percent tax on natural gas and 1.5 percent initially on crude oil from shale wells. The new money — as much as $500 million annually —would be used for an across-the-board reduction in income taxes.

His proposal has been criticized by some Republicans, the oil and gas industry and Zach Schiller of the left-leaning think tank, Ohio Policy Matters, which contends the income tax cut will not boost the economy but will create a wider gap between the rich and the poor.

During the dinner Kasich told the crowd of about 350 people that Ohio taxes total 20 cents on a $107 barrel of oil.

He said energy companies will make a lot of money if the drilling performs as expected and he believes Ohioans should benefit from it, rather than have all the profits leave the state.

Kasich also called for strong regulations on the oil and gas industry, saying officials must be sure “we don’t choose between jobs and the environment.”

Kasich said Ohioans will not support the industry if wells explode and ground water gets contaminated.

In comments afterward Kasich acknowledged that natural gas is not as profitable as it once was and so may not be as reliable a source of taxes as oil. But he said his proposal would tie the tax cuts to the revenue, so that schools and local governments would not be subject to additional cuts in state funding. He said he has heard the concerns of local officials about the state cuts they’ve already endured.

Kasich also outlined his proposals to raise student achievement in schools, make state government more efficient and use “common-sense” regulations so businesses can grow. He said Ohio is on the right track — with an auto industry that is growing and new jobs coming to the state.

“People have a sense that things are getting better,” Kasich said.

Those interviewed after the speech said they liked what they heard.

“I like the idea of creating jobs and I think he’s doing it,” said R.C. Harrison, of Kettering.

He and Merle F. Wilberding, a Dayton attorney, both said the oil and gas tax idea is an opportunity for the state and would be a good way to cut income taxes.

“I was shocked at how low the (tax) levy is on those companies,” said Wilberding.

Kasich outlines proposal to lower income taxes 

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