Ohio Geniuses Deal With Frack Tax

Even in the midst of our shale oil and gas frack-o-rama, Ohio's oil/gas "severance" taxes are mere flat fees per barrel or per cubic foot, and remain among the very lowest in all of the U.S.  Our effective severance tax rate in Ohio is just 0.19% -- pathetically low, almost everyone agrees.  By contrast, North Dakota is 11.5% and Alaska is 12.5% to 15%.

To his small credit, even Gov. Kasich is in favor of a "frack tax" in Ohio.  The Ohio Environmental Council recommended 5%.  Kasich wanted 2.75%.  Yesterday, the Ohio House passed a new severance tax bill, but cut the rate to 2.5%.  The bill now moves on to the state senate.

"Voila!  An income tax cut!"

It all still sounds sort of good, but here's the thing -- almost none of the tax revenue generated will go to the fracked areas of the state; only 15% to 17.5% of the money will be set aside to protect/repair the air, land, water and human health endangered by fracking.

Instead, almost all of it will go to pay for Kasich's dream, the state income tax cut.

It's the Republican way.