COLUMBUS, Ohio – The Ohio House has approved legislation raising Ohio’s tax on oil and gas drilling despite harsh criticism from Democrats and anti-tax Republicans.
The measure passed on a 55-35 vote Wednesday, after clearing a committee by a single vote a day earlier, and now heads to the Senate.
The bill imposes a 2.5-percent severance tax on horizontal wells, including those extracting resources through hydraulic fracturing, or fracking. That is less than the 4.0 percent Republican Gov. John Kasich wanted but more than the industry would’ve liked.
The 15 percent of tax proceeds that goes to local communities has divided lawmakers. After state local-government and library funds are restored, 25 percent of the remaining allotment goes to county budgets. That’s down from 50 percent proposed earlier.
Opponents say that’s not enough to fund needed infrastructure improvements.
House Democratic Leader Tracy Maxwell Heard (D-Columbus) criticized the GOP for fashioning a plan that allows for income tax cuts that will benefit richer Ohioans, rather than the poorer, Appalchian counties where most of the fracking activity will be going on.
“Ohio Republicans will stop at nothing to pad the pockets of the wealthy and well-connected,” she said in a statement after casting her “no” vote.
After $21 million is set aside for the Department of Natural Resources for drilling regulations, like capping orphan wells, Heard says 85 percent of the remainder will go toward “income tax cuts targeting the wealthiest Ohioans, while some 17.5 percent will go to local governments.”