Ohio lawmaker: Use fracking tax to boost budgets

By Marc Kovac | R-C Capital Bureau Published:

COLUMBUS -- A Democratic state lawmaker wants Gov. John Kasich to increase taxes on oil and gas production, but use the proceeds to support local governments and schools rather than instituting an income tax cut.

"The governor's numbers, I think we call them bogus (expletive) numbers -- at least I do," said Rep. Bob Hagan, a Democrat from Youngstown. "He's pretending that he wants to give this tax cut across the board to everyone. ... (If he's going to) brag about a billion dollar rainy day fund and then continuously cut local government dollars from our local governments and education dollars, then he should increase (the severance tax) substantially, quit playing games with it, and make sure that it goes to local governments and education."

Hagan made the comments during a press conference at the Statehouse, where liberal groups voiced concern about federal budget issues and the potential impact of spending cuts on Ohio.

In recent days, Kasich has touted another budget surplus for the year, with potentially $1 billion slated for the state's rainy day fund. That latter was near zero when Kasich took office.

Democrats have called for surplus funds to be used to support local governments and schools rather than stored away for another day.

But both House Speaker Bill Batchelder, a Republican from Medina, and Senate President Keith Faber, a Republican from Celina, said Wednesday the surplus should be added to the state's savings account.

"It's just like any family, you need to well stock your rainy day fund and you need to make sure you're anticipating contingencies," Faber said.

Faber said lawmakers will consider local government funding issues as part of coming budget deliberations.

"They've made a case that they've made significant cutbacks, and we'll take a look at that," Faber said.

Kasich also continues to back a plan that would increase tax rates on oil and gas produced from eastern Ohio's emerging oilfields, thanks to horizontal hydraulic fracturing, or fracking.

The governor and other proponents say the existing rate is too low, the increase they're proposing would keep Ohio's rates lower than other states, and the proceeds could be used to cut income tax rates for all Ohioans.

The proposal is expected to be part of a larger tax reform package to be unveiled in coming days.

Hagan and others support the severance tax hike, as long as the proceeds are used to support local communities and schools and not for another income tax cut.

The resulting funds could help eastern Ohio communities dealing with increased drilling activities, Hagan said.

"I've never seen so many lobbyists from the gas and oil industry in one place in the 26 years that I've been here," he said. "And they're winning this. So those of us that have an obligation to stand up and fight for local governments and fight for education dollars have to do it now, and we have to confront the governor on it."

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

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  • What a bunch of greedy HYPOCRITES (bastards)! How about giving the taxpayer a break? Why don't you Dems quit spending. Giving to local communities and schools, is code for "Give it to the Unions". Then there will be more money in the local coffers to pay for wage hikes, pentions/benefits, Obamacare. Help the taxpayer, lower income tax rates for ALL OHIOANS! I thought the Dems were for the people? Oh! Sorry, I forgot, Dems supporters that are on the dole don't pay income tax. Part of the redistribution,(fair(FARE)share) of wealth the community organizer from Chicago spoke about so often.