Ohio should avoid oil taxes that are punitive

Gas and oil drilling have provided something of a lifeline for East Ohio counties where thousands of steel and aluminum mill workers have lost their jobs during the past several years. Indications are the economic impact of drilling will increase.

That was on the minds of many state House of Representatives members who have rejected a substantial tax increase on drillers, sought by Gov. John Kasich and many Democrat lawmakers.

The House approved a 2.5 percent severance tax rate on horizontal drilling this week. Kasich had asked for 4 percent. The bill includes other tax provisions, some of which will benefit drillers.

Industry representatives had argued that Kasich’s plan would have increased taxes to the point many gas and oil companies would have found Ohio a bad place to do business. Most House members agreed, to judge by the 55-35 vote on the measure.

Preposterous arguments made by some in favor of higher taxes may have backfired. Rep. Mike Foley, D-Cleveland, called it “irrational” not to establish high taxes.

“I’m frustrated that the science (on climate change) is out there, the science is clear, and no one seems to be paying attention to it,” he said.

That is an absurd reason to enact punitive taxes against drillers, of course. Gas is replacing coal – the primary culprit in climate change, according to people like Foley – as a power plant fuel.

State senators should approve the House bill and Kasich should sign it into law. From their standpoint, it is the best they are going to do in wringing new tax revenue from drillers.