Ohio Governor John Kasich unveiled a mid-budget review Wednesday that calls for a significant cut in Ohio income taxes, which will be tied to an increase in taxes on oil and natural gas.
The plan is to take advantage of the “fracking” boom in eastern Ohio, where energy companies are drilling the Utica and Marcellus shale formations for crude oil and natural gas liquids. According to Kasich’s proposal, the more tax revenue the state is able to raise from energy companies, the more it will cut income taxes – up to a 5 percent cut in 2017.
In all, the proposal would save Ohioans almost $1 billion in income taxes over the next five years.
“If Ohioans aren’t benefiting, then some shareholder in Texas will benefit,” Kasich told reporters. “There’s gold in them thar hills. How much gold, we’re not sure. But I’d rather be sharing the wealth with Ohioans than investors living elsewhere.”
The oil and gas industries immediately argued that the plan was harmful to a growing industry, and The Columbus Dispatch reported that Kasich will have a difficult time getting the proposal passed, because even fellow Republicans are concerned about funding a tax cut with a corresponding tax increase.
The tax proposal was only one part of a massive plan that Kasich said would dramatically change how the state operates.
“Almost every time I turn around, I find another piece of broken Ohio,” Kasich told reporters Wednesday. “I think the people of the state ought to feel good that we’re working day and night and burning the candle at both ends to live up to our responsibility.”