Opposition Mounts to Governor's Tax Proposal

Last week we discussed the tax changes that Governor John Kasich is proposing, which would increase the tax obligation on companies pulling natural gas from the ground while decreasing the income tax for Ohioans.  In our post on the topic, we mentioned that the plan was sure to meet opposition.

While that couldn't exactly be considered going out on a limb, it doesn't change the fact that we were right.

The Marion Star reports that the tax plan proposed by the Governor is getting a mixed reaction.  More after the jump...

First up, the oil and gas industry.  They made the typical argument that increased taxes would decrease the number willing to invest in drilling in Ohio.  The Ohio Oil and Gas Association released a statement noting that the tax structure for their industry was just adjusted two years ago.  The current tax system, they say, is "fair, competitive with neighboring states and attractive to investment."

The statement continues:  "Though we would generally support an income-tax decrease, we do not support asking one industry to disproportionately fund it.  We also believe that Ohioans who have struggled during the economic downturn would prefer to have a good-paying job now, instead of a small tax break years down the road."

Threats from the oil and gas industry to curb their investing in response to the increased taxes are far from unexpected.  Industry representatives began making statements to that effect when the governor first hinted at tax changes.

Other opponents to the tax changes made very different arguments.  For example, the liberal think tank group Policy Matters Ohio said that the tax increase on oil and natural gas liquids should be even higher than the 4 percent that Kasich proposes.  Public safety groups and advocates for the poor argued that the mistake is directing the money towards income-tax relief instead of using it to fund government programs which have faced cuts during rough economic times.  Liberal policy group ProgressOhio criticized the governor for using the policy package to reward political allies.

With all of that being said, the proposed changes have also garnered praise from several groups.

"The successful implementation of the Governor's plan will allow caseworkers to spend less time on unnecessary bureaucratic processes and spend more time focused on achieving positive outcomes for Ohio's families, seniors, and disabled population," says Joel Potts, who directs the Ohio Job and Family Services Director's Association.

Jack Shaner of the Ohio Environmental Council said that elements of Kasich's energy plan are "really positive and ambitious," specifically citing a proposal to capture and reuse waste heat.

However, the opposition to the plan may make it very difficult for the proposals to be passed through and become a reality.

What do you think of Governor Kasich's proposal?  Share your thoughts here or on the message boards!



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