COLUMBUS - If Ohio lawmakers don't achieve the kind of balancing act Ohio Gov. John Kasich wants to see in a natural gas and oil well tax, the Republican said Thursday he would not hesitate to strike it down.
"If I don't have a severance tax that doesn't pass the smell test, I will veto it,'' Kasich said at during a legislative and political preview session for journalists, put on the Ohio Associated Press.
The middle ground that Kasich said needs reached: Ohio must receive the fair value of the resources that are being depleted from the earth, and simultaneously, the proposal must be such that it doesn't scare away business.
"It's kind of like porridge," Kasich said referring to the beloved children's tale, Goldilocks. "It can't be too hot, it can't be too cold. It has to be just right."
Right now, a bill in the powerful House Ways and Means Committee that's gotten industry support would put into place a 1 percent tax during the first five years of production and 2 percent thereafter. When production at the well declines, the rate would drop back to 1 percent.
Despite the support from the Ohio Oil and Gas Association, the bill is being met with concern from some Democrats who want to see it changed to funnel back some of that tax money to counties most impacted by the blossoming industry.
House representatives Sean O'Brien and Bob Hagan of Youngstown are trying to revise the proposal; Hagan has gone as far as introducing legislation that he says is more competitive - 7.5 percent, with a portion returned to the communities impacted by the drilling industry.
The legislation also would roll back similar taxes on traditional wells.
Right now, Ohio has what is referred to as a nominal severance tax of 3 cents per one thousand cubic feet (mcf) for natural gas and 20 cents a barrel of oil.
Legislative leaders from both chambers also spoke at the proposed oil and natural gas tax.
House minority leader, Democrat Tracy Heard, said her caucus supports the proposed revisions, which would provide a pool of money for infrastructure work and job training. It's especially important, she said, with local communities receiving less from the state.
A top Republican, meanwhile, is calling for gradual and careful construction of a severance tax proposal.
House speaker William Batchelder said he's "very anxious" for the full development of Ohio's oil fields. However, the state's poor history with orphan wells - abandoned, improperly plugged gas and oil wells - is cause to move "gradually and carefully" while putting this together.
Senate Minority Leader Democrat Joe Schiavoni urged lawmakers to not wait in finalizing a severance tax that would invest in job training and funds to fix roads.
"We can't wait around for this. Gas companies are not waiting to drill,'' Schiavoni said. ''We can't wait to have a severance tax in place.''
Absent a provision that would return some of the funds to the impacted communities, Schiavoni said, he would not support a proposal. The money should he returned to the areas where the resource is "being pulled from the earth."
Others who appeared were Secretary of State Jon Husted, Ohio Auditor Dave Yost, Ohio Attorney General Mike DeWine and chairman of the Ohio Democratic and Republican parties, Chris Redfern and Matthew Borges.