Kasich touts benefits of income tax proposal

COLUMBUS — A plan to tie a reduction in the state’s income tax to an increase in severance taxes on shale oil and gas production will accomplish two things, Gov. John Kasich said Tuesday. It will best position the state to benefit from Ohioans with more money to spend and an industry set to expand in the state, he said.Kasich, a Republican, said the effort is all part of a broader plan to increase the business environment in the state by helping small businesses. Speaking during a teleconference with reporters, the governor said the state’s income taxes are too high, while the severance taxes — currently around 20 cents on a $107 barrel of oil — are too low.“We just really feel that this is extremely important because of what it represents in a number of ways,” Kasich said. “One is the positive benefit it will have on small businesses. That is the engine of economic growth in our state.”Administration officials said increasing the severance tax to 1 percent and linking it to a reduction in the income tax could mean as much as $500 million annually in tax cuts by 2016.“We believe that to allow companies to come in and be able to transfer billions and billions of dollars out of state to their investors means that Ohio doesn’t get its fair share,” Kasich said. “We’ve had states like Texas and Oklahoma, Alaska and even North Dakota right now, what they’re doing is they’re transferring their tax burden to Ohio.”Kasich said it’s about time for Ohio to do the same thing.“Look, they’re coming here because as I like to say, ‘Thar’s gold in them thar hills,’’ Kasich said. “They are coming here. They can’t wait to get here. They can’t wait to pull this stuff out of the ground.”The benefit of the current plan is that small producers are eliminated from the severance taxes altogether while those companies that would be subject would only pay if they are able to produce from drilling efforts, Kasich said. The governor conceded experts and politicians alike don’t yet have a handle on just how much of the natural resources are available.“We don’t yet know what we have,” he said.There has been some resistance, even within his own party, to the proposal. House Republicans have indicated they will not talk about the proposal during the mid-budget review this year. Kasich, however, said none of that will deter him.“This will benefit the long-term economic strength of Ohio. We cannot let this moment pass,” Kasich said. “Look, I don’t get it now, I’ll look for another opportunity to get it. I’m just going to keep at it, each week, each month, if I have to put it in the budget next year. It doesn’t matter to me. This is about what I think is the right thing to do for our state.”You can comment on this story online at www.limaohio.com.