Since Gov. John Kasich refused to put Compressed Natural Gas tax credits in the Mid-Biennium Review, State Sen. Capri Cafaro should spearhead the attempt to write the credits into law and hopefully the governor doesn't veto the legislation.
Kasich's aversion to tax credits is understandable. One problem is that whenever the state provides credits, it retards the ability to cut taxes elsewhere. An Ernst & Young study soon to be released points out that tax cuts have led to job creation in Ohio. So tax credits can be a nasty habit.
Another problem is that over time, the reasons for the credits go away but the credits themselves have stayed in place. So Ohio has been dealing with the dilemma of providing credits for reasons that make no sense, to companies and groups that are no longer deserving, and in some cases for reasons that nobody even remembers.
But State Rep. Sean O'Brien, D-Bazetta, and Dave Hall, R-Medina, have a proposal that makes sense. They wants tax credits for people and businesses that convert vehicles from gasoline to compressed natural gas. This could boost an industry that Ohioans hope will stimulate the state's economy and that provides the most promise here in the Mahoning Valley. The entire nation could see an end to American dependence on foreign oil.
Yes, the private sector should, and in this case eventually would, drive the market. But there's nothing wrong with incentivizing early stages to expedite a good thing. Even Ohio provides incentives to keep current employers and lure new ones.
The key element that should make O'Brien's and Hall's proposal palatable is a sunset clause. The law goes away in five years.
The representatives' House Bill 366, with 63 co-sponsors, passed unanimously and was quickly referred to the Senate Finance Committee. With Democrat, Republican and Tea Party support in the House and Senate, it is truly bicameral.
Those who convert their vehicles can recoup 50 percent of the cost up to $5,000 through tax credits that carry over until exhausted. Conversions typically cost more than $10,000. CNG sells for about two-thirds the price of gasoline. The conversions really benefit only those who compile substantial mileage. This would include commercial fleets.
O'Brien's and Hall's bill also sets aside $15 million in grants for public sector fleets that retrofit their vehicles or purchase new CNG-powered vehicles.
Having Kasich include the tax credits in his mid-biennium review would expedite the proposal's passage. Kasich responded with a resounding no.
So the legislature will continue moving the bill and, hopefully, it passes without a Kasich veto.