Ohio’s drilling counties must reap benefits
Simple fairness dictates that if Ohio legislators enact a new tax on gas and oil drilling, counties providing the bounty should benefit more than other Buckeye State residents.
Lawmakers are considering increases in the state severance tax, of up to 2 percent on gas and oil produced from certain types of wells. The idea, first suggested by Gov. John Kasich, is to provide money for a statewide income tax reduction.
That is fine – providing it does not adversely affect Ohio’s ability to attract gas and oil drilling.
But before the $200 million a year expected to come from the tax is distributed, counties where wells are being drilled should get some of the money.
Two Republican state representatives, Jay Hottinger of Newark and Al Landis of Dover, point out gas boom counties should be compensated for road damage and other expenses related to drilling. They have support from state Rep. Sean O’Brien, D-Brookfield, and state Sen. Capri Cafaro, D-Hubbard.
They are absolutely right. If legislators go forward with the tax, amendments suggested by Landis and Hottinger to benefit counties where wells are located – mostly in Eastern Ohio from Trumbull County south to Monroe County, for now – should be adopted.
As the legislators and Kasich’s administration continue to tweak the proposal, they should also be careful to not lose industrial job growth to neighboring Pennsylvania.
Pennsylvania Gov. Tom Corbett and legislators in the Keystone State have approved a variety of measures that use tax dollars to make doing business there easier and more lucrative to drillers. One includes using tax dollars to build a pipeline that will link vaccine company Sanofi Pasteur; another, subsidizing a processing project by plastics maker Braskem S.A. of Brazil.
Certainly industries profiting from the oil and natural gas boom in the Buckeye State should pay their fair share. But for Ohioans to truly capitalize on their natural resources, we need to land petro-chemical, plastics and other industrial customers of natural gas.
If we don’t encourage, incentivize and lure these companies, pipelines will ship the product elsewhere and others areas, some a lot further away than Pennsylvania, will grow their economies on our backs.