Democratic state reps. Robert Hagan of Youngstown and Mike Foley of Cleveland announced legislation Tuesday that would boost an Ohio tax imposed on drilling for natural gas.
Their proposal would raise Ohio’s severance tax on natural gas wells to 7 percent.
The state’s effective tax rate is currently less than one-half of 1 percent — the lowest of all shale-gas states that collect a severance tax.
Some of the newly collected tax would help local communities affected by hydraulic fracturing, or fracking. Other revenue would go into a re-established fund for clean energy.
“Gas companies will be making billions off of Ohio’s natural resources,” Foley said. “Ohioans need a fair shake and a place to turn when those natural resources are gone.
“This bill would not only give impacted communities funding to repair roads and bridges used by heavy fracking trucks, but also jump-start a new energy industry to offset the used natural gas.”
Added Hagan, “To say that we, as a state, are doing enough to ensure financial fairness in natural gas extraction is a flat-out lie at this point. … What we’re asking for is a pittance.”
Last December, a Cleveland-based economic research group said Ohio could raise $538 million in revenue through 2015 if it imposed a severance tax at rates similar to neighboring states.
Texas has severance tax rates of 7.5 percent; Oklahoma, 7 percent; and Arkansas, Michigan and West Virginia, 5 percent. Pennsylvania has no severance tax but is considering one.
Policy Matters Ohio has urged Ohio to raise its severance tax rate on oil and gas drilling to 5 percent.
Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.
Rig Count Interactive Map by Baker Hughes, an energy services company.
Shale Sheet Fracking, a Youngstown Vindicator blog.
The Ohio Environmental Council, a statewide eco-group based in Columbus.
Earthjustice, a national eco-group.
People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.
Concerned Citizens of Medina County, a grass-roots group.
No Frack Ohio, a Columbus-based grass-roots group.
Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.
Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.
Allegheny Front, environmental public radio for Western Pennsylvania.