Columbus — Cuyahoga County Executive Ed FitzGerald said he would seek more involvement from communities in eastern Ohio’s emerging shale oilfields before considering substantive changes to tax rates on oil and gas produced via horizontal hydraulic fracturing.
The Democratic gubernatorial hopeful even floated on idea — providing tax breaks to companies that hire Ohioans to work in those oilfields rather than relying on out-of-staters.
“… If we’re going to tax oil and gas additionally, we’re going to have an investment strategy where we work with local nonprofits and local government and local businesses about how to put those people back to work,” he told reporters during a press conference at a Columbus union hall. “The governor has said repeatedly that he wishes the oil and gas companies were hiring more Ohio residents. Why didn’t he sit down with the oil and gas industry and say your tax rate can be affected by the number of Ohioans that you train and place in those jobs?”
FitzGerald offered the comments during the press conference where he outlined his approach to energy policy.
His spokeswoman, Lauren Hitt, said FitzGerald was not proposing a severance tax increase.
“He’s not proposing one … he’s not going to support that as part of his run for governor,” Hitt said.
In a released statement, Chris Schrimpf spokesman for the Ohio Republican Party, called FitzGerald’s comments “a Jack Kevorkian approach — profess to keep big oil’s absurdly low severance tax low while you simultaneously prepare to humanely kill Ohio’s coal and natural gas jobs.”
Kasich and Republican lawmakers have been at odds over the severance tax issues for the past couple of years.
The governor wants to increase rates for oil and gas produce via fracking, saying Ohio’s rates are lower than other states, and energy companies should be contributing more to the state’s coffers.
House Republicans moved legislation in May calling for a lower tax increase, with exemptions for initial investments in wells and commercial activity taxes paid on horizontal wells. Kasich isn’t supporting that bill as written.
Some Democratic lawmakers have called for even bigger increases in the severance tax, with the proceeds used to help local governments, particularly those in eastern Ohio.
Marc Kovac is the Dix Capital Bureau Chief. Email him at firstname.lastname@example.org or on Twitter at OhioCapitalBlog.