You may remember this letter by NTU’s Andrew Moylan in June, cautioning Ohio Governor John Kasich against “enacting harsh tax hikes on the oil and natural gas industry.” The letter warned that the governor’s proposal to reduce income taxes by passing harmful taxes on energy exploration could have devastating effects on Ohio’s growing energy economy, which was estimated to generate over 200,000 jobs, increase output by over $22 billion and taxable wages by over $12 billion. Fast forward one month. The energy tax hikes are still on the table, and a recently-released report says that Ohio has plummeted from second place to fourteenth in attractiveness for energy exploration. Not exactly the most shocking news of the day.
A number of the oil and gas executives surveyed were quick to criticize Governor Kasich’s proposed tax increase. Though it hasn’t been imposed yet, many energy company officials expressed concern about what the proposal entails for Ohio’s future business tax climate.
After falling TWELVE spots in attractiveness for energy exploration in but the span of just one month, I suppose it’s easy to say “We told you so.” The energy tax hikes will hamper a growing industry and slow an already-difficult economic recovery. While Governor Kasich has the right idea about the necessity of reducing the state’s income tax, it’s time to scrap the harmful energy tax proposal and instead focus on pairing income tax cuts with reductions to spending that grew 43 percent (even after adjusting for inflation) between 2000-2010.
For those of you with an interest in the politics of the Buckeye State, be sure to pick up a copy of Taxpayers Don’t Stand a Chance: Why Battleground Ohio Loses No Matter Who Wins (And What To Do About It) by our good friend Matt Mayer.