Governor John Kasich is working to line up support in Ohio's drilling heartland for his proposed tax increase on oil and gas drillers by offering to send a quarter of proceeds back to Appalachia.
The Republican governor initially proposed raising oil and gas severance taxes to 4 percent to fund a statewide income-tax cut. Legislators, energy companies and economically challenged eastern Ohio counties balked, forcing the administration to regroup. Republican state Rep. Ross McGregor likens the new proposal to earmarking a portion of Turnpike bond proceeds to northern Ohio. It raises the severance tax rate to 4.5 percent and sends 25 percent of revenues to 33 Appalachian counties. The rest would still go to statewide income-tax reductions. Ohio's oil and gas association remains strenuously opposed.