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Opportunity Ohio report on Kasich severance tax hike

Table 3 from Opportunity OhioOhio think tank Opportunity Ohio released a position paper titled, ‘Oil price decline and weak production results should end Kasich’s severance tax hike plan’.  Read the full report here.

From Opportunity Ohio:

With the release of the production figures for the 3rd Quarter, any discussion of increasing the severance tax on Ohio’s energy entrepreneurs, farmers, and landowners should end.  This outcome is even more critical given the plummeting price of oil, which will negatively impact exploration and investments – especially in weaker shale plays like Ohio.            

Governor Kasich has been a supporter of increasing the severance tax, a tax imposed on the removal of nonrenewable resources like oil and gas, for three years.  Pledging to reduce Ohio’s income tax, Kasich has zeroed in on taxing the newly emerging energy industry as a way to balance Ohio’s budget.

“You’re not going to get this done by just slashing government spending,” Kasich said at a Chamber of Commerce speech during the 2014 election.

From Opportunity Ohio:

The bottom line is that Ohio is not a strong oil play.  With the price of oil declining, the marginal attractiveness Ohio held for energy companies is also declining.  There is a reason BP, Shell, Devon, Andarko- all top energy companies – and several smaller independent oil companies, have left Ohio.  Governor Kasich’s mantra that raising the severance ta didn’t matter because the energy companies wouldn’t have anywhere else to go has proved false.  Raising taxes in this kind of environment given the weak returns simply doesn’t make sense.

Read the full report at www.opportunityohio.org.

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