The 2020 Tax Policy Study Commission will meet this morning for the first time, 21 days after its deadline to produce a recommendation to the House and Senate on a new severance tax for shale fracking.
The seven-member commission is tasked with looking at the entire state tax code and eventually recommending changes to how Ohio funds governmental services. But the two-year budget passed in June contained specific language ordering the commission to focus first on the long-running debate over increasing a state severance tax that Gov. John Kasich has called a “total and complete rip-off to the people of this state.”
After negotiations among the House, Senate, Kasich administration and the oil and gas industry failed to yield a compromise for the two-year budget, Senate President Keith Faber, R-Celina, insisted on setting an Oct. 1 deadline for the commission to craft a recommendation.
“I’ve been disappointed, frankly, that they didn’t meet the original deadline,” Faber said. ” So they continue to work on language to try to get that ready to come out.”
The commission this morning is expected to accept a report from an informal working group that spent time over the summer trying to craft suggestions on how and when to increase the tax as drilling continues to expand in parts of eastern Ohio.
“One of the challenges we’ve had is no state does it the same,” said Sen. Bob Peterson, R-Sabina. “We’ve tried to build a summary that you can sort of make some comparisons across states, even though you have all those variations.”
Faber said a lack of agreement on severance tax language between the House and Senate continues to delay the process, along with changing market conditions that have seen oil and gas prices drop significantly.
The oil and gas industry has resisted efforts to increase the tax, particularly proposals by Kasich that it argues are too large and will stifle future drilling in the state.
“I think you’re seeing people trying to wrestle with a complex issue,” Faber said.
Peterson expects the commission will focus on the severance tax through the fall and early winter.
In addition to accepting the severance tax report, the commission today is scheduled to hear an overview of Ohio’s tax system.
This article was written by Jim Siegel from The Columbus Dispatch and was legally licensed through the NewsCred publisher network.