EODA focuses on controversial severance tax

Judie Perkowski Dix Communications Published:

If you were interested to know why state representatives for eastern and southeastern Ohio object to Ohio Gov. John Kasich’s proposed severance tax increase on the gas and oil industry, the Eastern Ohio Development Alliance board of directors’ meeting Friday morning at Salt Fork Resort & Conference Center near Cambridge was to place to be.

Talk about gas and oil and they will come.

After a brief welcome to more than 100 attendees by Guernsey County Commissioner Tom Laughman, EODA President Tracy Drake got the ball rolling, followed by comments from several other speakers.

“We are the region most impacted by shale development and we do not want the gas and oil companies to pack up and leave because of this tax increase. And, if this severance tax is passed, the revenue should stay in eastern and southeastern counties. My motto is ‘no taxation with localization,’” said Drake.

Chris Abbuhl of the EODA’s Governmental Affairs Committee challenged members of the Ohio General Assembly to direct revenue to local governments in the Appalachian region where the gas and oil is being extracted.

“Eastern [and southeastern] Ohio needs help and the shale development could be the answer.”

State Rep. Andy Thompson, chair of the Appalachian Caucus, said he is against the severance tax increase, and there should be fair distribution of revenue. Thompson cited the fact that revenue from the turnpike bonds isn’t going to be shared, it will be going to the northern counties. Furthermore, the same deal applies to the casinos in Columbus, Toledo and Cincinnati. The revenue from those entities will stay in the counties where the casinos are located.

“We are the envy of other areas in Ohio, in respect to the gas and oil development,” he said. “If the cost for shale development keeps rising, some opportunities won’t be realized.

“The most disappointing thing about the band of rich oil deposits, is that it is a very narrow band. Even though the Utica shale covers a lot of eastern and southeastern Ohio, the farther west it goes, the less chance of finding the oil deposits. So that narrows the area that can be explored and narrows opportunities.

“We don’t want to see any part of the state eliminated from the revenue, we just want to create a reasonable business plan. We have a responsibility to our local governments to encourage job growth, which is vital to economic growth. The gas and oil industry is an opportunity for thousands of jobs, not only in the industry itself, but many ancillary services.

“I feel strongly about this. Property rights belong to the landowners, not all Ohioans.”

State Rep. David Hall echoed Thompson’s thoughts about Kasich’s tax plan and said the governor’s budget is not written in stone.

“We are in the early stages of the budget process. We have a long way to go. It’s going to be a lot of give and take, and he [Gov. Kasich] won’t get 100 percent of what he wants.”

Hall said he will be attending a meeting in Texas with representatives of several big oil companies who want to know where we stand; what is our government’s position on the future of shale development in Ohio.

State Rep. Brian Hill is concerned that the gas and oil industry already pays several taxes.

“We are still in the exploration phase ... We want to encourage further development, it is way too early to run people out of the area,” said Hill.

As the executive vice president of the Ohio Oil and Gas Association, Tom Stewart said OOGA is in full support of Kasich’s plan to decrease or eliminate personal income tax, but does not support a tax on a particular industry.

“This area of Ohio has struggled for decades. It was reported recently that 38,000 jobs in Ohio were created by the gas and oil industry. What other industry can make that claim.

“And it is not just the gas and oil producers who will pay, landowners will also pay the tax in addition to other taxes.

The industry pays a commercial activities tax, income tax, sales tax at the state level, in addition to county property and municipal taxes,” said Stewart. “We cannot afford to impose more taxing where innovation and development is the most important.”

The EODA’s annual board of directors meeting will be April 26 at the Carlisle Inn in Walnut Creek.

The Eastern Ohio Development Alliance is a nonpartisan, independent, nonprofit organization, consisting of 16 counties in eastern and southeastern Ohio. Alliance members are Athens, Belmont, Carroll, Columbiana, Coshocton, Guernsey, Harrison, Holmes, Jefferson, Monroe, Morgan, Muskingum, Noble, Perry, Tuscarawas, and Washington.

EODA, through the cooperation of its 16 member counties, promotes economic growth of the region.

jperkowski@daily-jeff.com

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