Correction: Tom Zawistowksi issued the following correction to the second sentence in the press release on Tuesday, July 24, 2012:
Under the current rules, the oil and gas industry paid $16 million in state and local taxes in 2009, including severance taxes, and by 2014 it is projected by the Ohio Chamber of Commerce that the industry will pay $433 million per year. It is unnecessary to raise taxes when this industry is already on track to dramatically increase tax revenue.
PRESS RELEASE – Wednesday, July 18, 2012
Contact: Tom Zawistowski
Columbus, Ohio – The Ohio Liberty Coalition today came out against Governor Kasich’s proposed tax increase on the Ohio oil and gas industry. Tom Zawistowski, President of the OLC said, “What Governor Kasich is proposing is unnecessary and unwise. Under the current rules, the severance tax on oil and gas produced $11 million in state taxes in 2009, and by 2014 it is projected by the Ohio Chamber of Commerce to increase to $433 million per year. If the Governor wants to cut personal income taxes he can use that new money to do so. It is unnecessary to raise taxes when this industry is already on track to dramatically increase tax revenue. It is also unwise to throw roadblocks in front of an industry that is critical to the economic future of our state. Some companies are already leaving Ohio. That is not what we want.”
He went on to explain, “We understand the argument that the Governor wants to bring energy taxes in line with other states, but we do not agree that this is what Ohio should do. If we have a tax advantage then we think we should exploit that advantage and use it to attract more businesses. Then we will get more tax revenue from taxes generated by ‘downstream’ industrial and business activity.”
Zawistowski concluded by saying, “From a TEA Party perspective, to raise taxes on one group to give a tax cut to another group is simply redistribution of wealth. It is not the Governor’s job to pick winners and losers; his job is to run the state government as efficiently as possible. If he wants to cut taxes, he should cut state spending so he can cut taxes. We will encourage our member groups to contact their state senators and house representatives and ask them to oppose the Governor’s proposal.”
The Ohio Liberty Coalition is a coalition of Ohio Liberty Groups whose purpose is to unite conservative grassroots organizations for greater effectiveness in the state and nation, and to provide resources for member organizations to strengthen their groups. The OLC currently has over 75 liberty-minded groups across Ohio who are members of its coalition.
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The severance tax is a rent paid by mineral extractors to compensate the people of Ohio for resources that will be unavailable to future generations. A far more appropriate use of a severance tax is to fund research in renewable energy, so Ohio can produce and prosper once the fossil fuels run out — as they surely will one day.
More in The Ohio Republic at http://ohrepublic.com/2012/04/compound-fractures/.
The “people of Ohio” don’t own these resources, the property owners, or those who bought the mineral rights do. These taxes are just another way to extract wealth from the public (an increase in the cost of production, which will increase the cost of the ultimate product). Government is already taking far too much of our money to do things which either shouldn’t be done at all, or, if they have some legitimate purpose, are done in the most wasteful, corrupt, politically motivated manner imaginable. We need less government and less tax, on everyone and everything.
Research, pertaining to energy, or anything else, is no business of government; it is just another political rat hole to pour money into (most of which would be directed to the supporters of whoever is in power). When present energy sources become too scarce and/or difficult to extract profitably, the people who are doing it will switch to whatever is most cost-effective at the time (they are constantly looking for faster, cheaper, better ways to produce their products and alternative products). John D. Rockefeller didn’t need any government “help”, or research to develop the oil business and neither will his successors with whatever may replace oil, if government doesn’t tax and regulate them until they can’t function.
Harold – why dont you pay for renewable research instead of forcing me to through my tax money. The radical greens like harold never want to pay with their own money.
I think you are wrong about this. Why aren’t you speaking out against Clean Ohio Fund nonsense. What about Third Frontier? You seem to be silent about the government picking winners and losers there.
Where do you think the money is going to come from to pay for the road repairs caused by the heavy equipment? Roadwork needs to be paid for in advance.
Tax cuts for one group? It would be tax cuts for everyone.
What happened to reversing the renewable energy mandate?
Some companies are already leaving Ohio. That is not what we want.” – which ones? Energy companies?
No more taxing productivity. It is already bad enough we have unions fighting productivity.
Ya know, I gotta agree about taking care in any significant tax increase……… although ANY (small) tax on drilling should be earmarked only for improving Ohio current and future energy infrastructure improvements….. NOT to reduce the Ohio debt, (not go to the discretionary fund).
I agree with the Ohio Liberty Council on this. Kasich’s plan is like cutting your nose off to spite your face. Definitely not the way to go if you wish to make use of the low hanging fruit. (heh heh, guess cliche is my middle name)
I you people who voted against Issue 5 realized that it would have saved 3 billion in taxpayer dollars, you wouldn’t be whining about our governor looking at other ways to secure the Ohio economy. With that savings, each county could hire 682 MORE police an fire per county!
…That’s at $50,000 ‘ year per (public service) employee!
It’s sad so many dd fall for the ruse perpretrated by the unions who have over the years created this mess. How on earth wer firefighters, Teachers & Policemen were led to believe their jobs were at stake if union membership was abolished is beyond comprehension.
John… There would STILL have been the unions. SB5 was to stop bargaining without the 5 million private sector taxpayers at the table. Because Ohioans didn’t ‘get it’, they will be paying MORE into the $66 billion they already owe to public service union workers. That’s why Stockto CA and Scranton PA went bust and cut wages and benefits for them. They RAN OUT OF MONEY!
It has been my personal experience that most union leaders only protect those that support them, not those that do their jobs properly. They do not promote acheivements or productivety. That negative outlook permeates the political class we are forced to deal with, now.
Is it any wonder this nation is in debt beyond repair.
http://online.wsj.com/article/SB10000872396390443437504577545081209344456.html?mod=WSJ_Opinion_AboveLEFTTop#articleTabs=article
REVIEW & OUTLOOKJuly 24, 2012, 7:15 p.m. ET.Kasich’s Tax Swap
A creative Ohio plan to trade levies on income and energy..
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The U.S. fracking boom is leading an economic transformation, at least in the states with the wisdom to manage it well—c.f., gas-rich North Dakota’s unemployment rate of 2.9% versus gas-rich New York’s 8.9%. Less noticed is that it can also improve the tax climate, as evidenced by Governor John Kasich’s plan to convert Ohio’s energy wealth into a tax cut.
The Buckeye State currently imposes a relatively low 20-cent severance tax on oil and three cents for gas. For a barrel of oil, this double dime levy amounts to two-tenths of 1%, an artifact of the era when its resources weren’t economically or technologically recoverable. But hydraulic fracturing for natural gas and especially crude is now surging in the Appalachian foothills on the eastern side of the state. Think Youngstown.
Severance taxes are routine in energy states like Texas and Alaska, and they also commonly apply to other nonreplaceable resources like timber and coal. Mr. Kasich wants to modernize the tax structure now that Ohio is becoming an energy producer, but without enlarging government. Annual proceeds would go into a fund devoted to lowering all personal income tax rates dollar for dollar.
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Associated Press
Ohio Gov. John Kasich
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The proposal would raise the severance tax to about 2.7% of the market value of oil or gas, depending on the type of well. As the industry matures and production peaks, the tax would on present price trends raise between $459 million and $547 million each year, equivalent to a 5% across-the-board tax cut for each of Ohio’s nine brackets.
Yes, nine brackets. Mr. Kasich’s plan is welcome relief for a state with some 3,300 taxing jurisdictions, including some library boards and parks departments. This system led to a combined state-local tax burden that for most of the 2000s was among the country’s highest, according to the Tax Foundation. Ohio has dropped into the top third after Mr. Kasich’s first-year tax reforms, and his tax swap would reduce it further.
The energy levy shouldn’t stifle development. A study by Ernst & Young for the Ohio Business Roundtable compared the proposed severance levy to those in seven competing states, including North Dakota, Pennsylvania, Texas and West Virginia. It found Ohio’s tax would be 16% lower than the average for wells producing dry gas, 40% for oil. Including all energy taxes, Ohio would be 40% and 48% lower than the average, respectively.
The plan is controversial in Ohio’s Republican-controlled legislature and among some Tea Partiers, and as with any tax increase the danger is that some future government will renege, pocket the revenue and return to raising income taxes. But the energy levy is sure to increase if production booms, and the Kasich formula ensures the money isn’t spent on new programs. Meantime, lower rates on income and capital investment are a net plus for economic growth.
Another virtue of the Kasich plan is to increase public confidence in energy exploration by giving voters a stake in, and a direct share of, its economic benefits. Political opposition to fracking has led some states to squander this incredible natural gift. Attn: Andrew Cuomo. Mr. Kasich may have hit on a strategy to help prevent the New York Governor’s model of nonexploration from going national.
Tom Z
Why have you not come out against the Clean Ohio Fund?
This is redistribution wealth and socialism. You do not have to stand on your head to figure it out either.
1. Paying farmers to keep their land in farming by buying worthless development rights is redistribution of wealth and fascism. It is even worse when the money is borrowed. Pretty clear.
2. Spending millions on more and more parks is socialism and redistribution of wealth since you are buying the land from someone, especially when we do not need more parks. Who are they buying land from to create parks? Farmers more than not! So much for farmland preservation. See # 1
When I hear you speak out on this, I will consider that you are seriously concerned about Ohio. You were on the Ohio Farm Bureau Show. The host is a bigger supporter of the Clean Ohio Fund.
The radical environmentals like the Clean Ohio Fund.
If you are unfamiliar with this, shame on you. I will be glad to get you up to speed.
PS. I know George.
Mike
This tax increase proposal from the Kasich administration is just the latest in a long string of big government, anti-free market ideas coming from this administration. Please stay alert.
Some additional details on this tax and other problems facing Ohio here:
Kasich and Ohio Legislature “spread the wealth around” – http://chrislittleton.com/2012/06/25/kasich-and-ohio-legislature-spread-the-wealth-around/
Chris Littleton
Why haven’t you come out against the Clean Ohio Fund which is in place. It is a combination of socialism, facism and a redistrution wealth?
Why haven’t you come out against the Thrid Frontier?
The fact that you are silent on these 2 items which are in place and need to end causes me to question your credibility.
The third frontier has been in place prior to the Kasich administration. We have been against the 3rd frontier since its inception and when it was last on the ballot in 2010.
http://www.ohiolibertycoalition.org/op-ed-the-third-frontier-feel-good-fascism/