New taxes on companies drilling for natural gas and oil in Ohio have the support of a majority of the state's voters -- especially if the resulting revenue would be spent to cut income taxes for residents -- according to the results of a recent Quinnipiac University poll.
The survey of 1,069 registered voters, which was conducted May 2-7, found that 55% of respondents support a new tax on companies drilling for gas and oil in the state, and 60% said they would support such a tax if the money raised was used to cut income taxes for Ohio residents.
"This looks like an issue on which Gov. [John] Kasich has the voters behind him," said Peter Brown, assistant director of the Quinnipiac University Polling Institute.
Kasich had proposed new taxes on hydraulic fracturing (fracking) and natural gas liquids (NGL), passing the revenue along to Ohioans in the form of a personal income tax cut, but the governor's Republican colleagues in the House, unenthusiastic about raising taxes, tabled the proposals shortly afterward (see Daily GPI, March 6).
Kasich's plan would have taxed unconventional wells producing oil and NGLs at a rate of 1.5% of gross receipts for the first year. Producers that didn't recoup their investment in the first year could apply to extend the 1.5% rate for a second year, but otherwise they would have paid a standard rate of 4% of gross receipts annually for the remainder of the life of the well.
The governor's plan also called for taxing unconventional gas wells at 1% of gross receipts; eliminating the severance tax on conventional gas wells that produce less than 10 Mcf/d; taxing conventional wells that produce more than 10 Mcf/d by 1% on gross receipts up to a cap of 3 cents/Mcf; and implementing a $25,000/well fee to benefit local governments. Taxes for conventional wells producing oil and NGLs would have remained unchanged.
The poll also found that respondents support natural gas and oil drilling in the state 64-29%, and an overwhelming 82% think drilling will create jobs. And while a larger number of respondents (45%) think fracking will cause some environmental damage than those who believe fracking won't harm the environment (19%), more than a third (36%) answered that question "don't know." About the same number of respondents (35%) said they have not heard or read anything about fracking.
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