Benefit of plan to hike Ohio drillers tax disputed

Published on NewsOK Modified: March 24, 2014 at 4:29 pm •  Published: March 24, 2014
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COLUMBUS, Ohio (AP) — The administration of Republican Ohio Gov. John Kasich is differing with legislative budget analysts on how much a proposed tax increase on big oil-and-gas drillers will generate, as the two sides move toward a compromise this week.

The figure is pivotal as Kasich promotes a midterm budget package ahead of fall elections. He wants the plan to deliver the combination of cuts and revenue increases needed to push Ohio's income-tax rate below 5 percent, an accomplishment he would certainly tout on the campaign trail.

But fiscal experts disagree significantly on how much would be raised by increasing the severance tax rate on large-volume drillers to 2.75 percent.

Ohio's budget office places the amount to be raised over three years starting July 1 at $874 million. The Legislative Service Commission has projected an upper limit of $231 million for the same period on a lower rate of 2.25 percent being studied in the House.

State Rep. Matt Huffman, a Lima Republican who is sponsoring the House's severance tax legislation, said lawmakers are trying to sort out the competing figures from the administration and the industry.

"It's sort of counterintuitive that (the industry) would underplay how much production there could be, because the likelihood would be we'd just want to raise the rate," Huffman said. At the same time, he said the administration may be using estimates aimed at paying for the proposed Kasich's proposed income-tax cut.

"I'm just a simple country lawyer," Huffman said. "What we rely on is the research of the economists at (the commission)."

He said he anticipates a compromise bill will be ready as soon as Tuesday, containing elements of Kasich's plan and the industry-supported severance-tax proposal that already had been moving through the House.

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