Cambridge Area Chamber of Commerce President Jo Sexton released the following statement regarding Ohio Gov. John Kasich’s proposal to impose a severance tax on the gas and oil industry:
“The Cambridge Area Chamber of Commerce at its May 9, 2012 Board meeting voted to oppose the governor’s proposal to increase the severance tax on the oil and gas industry in Ohio. The severance tax has since become part of the governor’s current budget proposal and the Chamber reaffirms its opposition to this tax nearly one year later.
“The Board recognizes that Utica Shale development in Ohio is in its infancy and that it may take a few years to determine the full economic value of the formation. Ohio has been a business-friendly state and should continue to encourage oil and gas production and not build barriers that could jeopardize growth in this industry or any other. Economic projections show that tens of thousands of new jobs will be created if oil and gas companies make planned investments in the state, and more than $1 billion in new local and state tax collections will be realized beginning in 2015 because of oil and gas extraction.
“The Appalachian Region has experienced slow growth and high unemployment for many years. Drilling in the Utica Shale could result in economic growth that has not been seen in decades. There are more than 30 shale developments in the United States and many more overseas. If we over-tax the industry in Ohio, we will not be able to compete with other areas where the taxes are lower.
“Ohio can have capital investment, job growth and income tax cuts by allowing the natural course of the Utica Shale development to proceed unencumbered. The oil and gas companies already contribute to the local economy under current tax codes. The increased revenue generated under the existing tax system can fund income-tax cuts without risking Ohio’s economic opportunity relative to the gas and oil activities. The industry already contributes to ad valorem, income tax, commercial activity tax, and sales tax. States that have instituted severance taxes have experienced a decline in drilling activity after the tax went into effect. We do not want that to happen in Ohio. We want to remain competitive. Our top priority is economic development through shale oil and gas production.”
Questions? Contact the Chamber, 439-6688.