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  • Nick Bates

Severance tax moves to House Floor


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Simply put, the committee referred a bill with a low rate (2.5% reduced further by tax credits) and a small amount of money for a handful of initiatives. Texas has a rate of 7.5%, West Virginia has a rate of 5%. Our 2.5% rate remains very small. Representative Hill (R-Zanesville) voted against the bill because it just didn’t invest enough into the communities impacted by fracking and struggling to get by. Amendments to dedicate revenue toward local government, pay off a federal loan, and to invest in workforce development were defeated. Instead the majority of this new money will benefit the wealthiest Ohioans with an income tax cut.

The bill does provide a starting place for the Senate and Conference Committee. The bill creates a legacy fund which – if properly capitalized – could provide long-term economic stability and be a ‘game changer’ for the region. Currently it will never fulfill its potential. The bill also allocates some revenue for local governments.  Rep. Cera (D- Bellaire) pointed out that this revenue will be divided between over 20 counties and not go that far as he introduced an amendment to allocate 50% of the revenue to impacted communities instead of 15%. The bill does make a good step forward for environmental activists by allocating resources to plug orphan wells.

Moving forward, the media, candidates and interests groups talk about this bill very differently. Some will call it a tax increase, others a tax cut. Yes it is a tax increase on drillers, but a tax cut for the wealthy. Most importantly it is a failure to strengthen our communities with great public services that are needed.

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