As a follow-up to my piece on the horrors of HB 375, Ohio Republicans’ plan to alter the state’s severance tax on the oil & gas industry, I came across an article from The Columbus Dispatch on the potential impact of the bill to tax revenues in the state:
The state tax commissioner says the impact on Ohio taxpayers of a tax plan for the state’s burgeoning oil and gas industry — sold as a way to reduce Ohioans’ taxes — cannot be predicted.
“The bill has some significant components that would have unpredictable impacts on state revenues,” Tax Commissioner Joe Testa told The Dispatch. “Specifically, the net-proceeds model it’s based on gives us no way of knowing what net figure these taxpayers will be declaring.”
Testa joins the nonpartisan budget analysis arm of the legislature in declaring the financial impact of the severance tax in House Bill 375 difficult to ascertain. Money would go for drilling oversight, capping of orphan wells and a minor annual income-tax cut.
“It allows for credits to be taken against other taxes for severance tax paid,” he said. “That approach is a lot like the old corporate franchise tax that Ohio wisely did away with because there were too many loopholes.”
Buried at the bottom of the article, however, is a single clause in the last sentence of the piece that, while not surprising in the least, is definitely illuminating. Tom Stewart, the president of the Ohio Oil and Gas Association noted that
oil and gas interests came up with the methodology used in the legislation.
In other words, the industry wrote the language on what may be the most important piece of legislation regulating their profits in Ohio over the last 40 years.
We already knew that HB 375 amounted to little more than a massive giveaway to Ohio’s oil & gas industry. Now we have proof, straight from the horse’s mouth.