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2017-03-10 / Energy Updates

Ohio drillers say 6 shale counties saw $43M tax bump

Columbus, Ohio (AP) Oil-and-gas drillers in Ohio have paid $43 million in property taxes to local governments and schools in six shale counties since 2011, according to a report released Thursday.

The finding by the Ohio Oil and Gas Association and Energy In Depth Ohio, a natural- gas research and education group, comes as Republican Gov. John Kasich has renewed calls for a severance-tax increase on the industry.

Kasich’s proposed two-year, $66.9 billion operating budget raises $448 million from the severance-tax increase. The increase would combine with other tax reforms to pay for a net statewide income-tax reduction of $39 million.

Thursday’s report shows Belmont, Carroll, Harrison, Noble, Monroe and Guernsey counties have seen a combined 22 percent revenue boost from the longstanding ad valorem real estate property tax, amid a 35-fold increase in natural gas production.

The industry projects that continued growth will allow the same tax to generate between $200 million and $250 million over the next 10 years.

Energy In Depth state director Jackie Stewart said counties have the opportunity to build a coordinated regional growth strategy based on those estimates. She said the tax has been misunderstood and hard to track, so her organization took the initiative to sort out the information and provide it to the counties.

Shawn Bennett, executive vice president of the Oil and Gas Association, said Kasich’s tax proposal could negatively impact an industry that’s already giving money back to the communities.

Kasich argues the industry’s operations in Ohio’s lucrative Utica Shale play is strong enough to sustain a severance tax increase.

His fellow Republicans in the state Legislature have shown little appetite to approve the tax increase.

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