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Poll Finds Most Ohioans Oppose Higher Severance Taxes

A Harris Interactive poll found that most registered voters in Ohio are opposed to higher severance taxes on oil and natural gas, believing such increases would destroy job creation and harm the economy.

The poll, which was conducted for the American Petroleum Institute (API), also found that most respondents believe higher severance taxes would harm consumers of gasoline and home heating fuels.

"Ohio voters understand that increased taxes on energy development could have a direct negative impact on them," said Ohio Petroleum Council Executive Director Chris Zeigler. "This survey tells us Ohioans are leery of anything that hinders the promise of high-paying jobs and a better quality of life associated with shale energy development. Ohioans worry that any tax increase could lead to higher costs."

Republican Gov. John Kasich has proposed a 1% severance tax on natural gas produced from unconventional wells, but has proposed eliminating the severance tax on gas from conventional wells that produce less than 10 Mcf/d; conventional wells that produce more than 10 Mcf/d would be taxed at 1%, up to a cap of 3 cents/Mcf (see Shale Daily, Feb. 6).

Kasich has also proposed enacting a 1.5% severance tax on crude oil and natural gas liquids (NGL) from horizontal wells for the first year and 4% in subsequent years. The state's 20 cents/bbl severance tax on oil from conventional wells would remain unchanged. Ohio does not currently levy a severance tax on NGL.

According to the poll, 75% of respondents agreed that higher energy taxes would, in turn, drive up energy costs for consumers. The poll found 69% believe higher energy taxes would harm job creation and the economy, and 81% said politicians in Washington should focus on solving the nation's budget issues, not raising energy taxes. Also, 67% said they believe raising taxes just for oil and natural gas companies would constitute bad tax policy.

On issues specific to Ohio, the Harris poll found that Ohioans believe, by a 68-25% margin, that increasing oil and gas severance taxes would slow development. Most respondents also agreed that higher severance taxes in Ohio would harm job creation (69-24%), the state's economy (76-19%), and consumers of gasoline and home heating fuels (77-17%).

The results of the Harris poll are in contravention to two earlier polls conducted by Quinnipiac University. Last December, the school found that 62% of Ohioans supported the proposed severance taxes on horizontal wells and NGL, if the revenue went to cutting state income taxes (see Shale Daily, Dec. 28, 2012). Ohioans told Quinnipiac they liked the idea in a May 2012 poll, too (see Shale Daily, May 14, 2012).

Kasich's proposals are in the state budget bill, HB 59.

The Harris Interactive poll surveyed 605 registered voters between March 25 and 31 and has a margin of error of plus/minus 4.0%, at 95% confidence.

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