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Kasich tax plan absent from Ohio House budget bill

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COLUMBUS, Ohio (AP) - The Ohio House moved closer to a vote Wednesday on a sweeping package of spending and policy initiatives spearheaded by Gov. John Kasich, after stripping out his signature tax provision on oil and gas.

Kasich's fellow Republicans in the House opted to pull the proposal for more study. It calls for increasing Ohio's severance tax on oil and gas production by 4% and spending the revenue on income-tax relief. The governor continued to fight for its inclusion, however.

A House vote was scheduled Wednesday afternoon on the midterm budget bill after dozens of committee changes were made Tuesday. The changes included pulling from the bill a provision that sent Planned Parenthood to the back of the line for federal funding, but keeping a provision that establishes state trooper authority in privately owned correctional facilities.

Kasich's administration took the unusual step of crafting the bill outside the normal 2-year budget cycle, as a way to move forward with policy initiatives the governor launched last year after taking office.

The measure headed to the House floor over the objections of local government and school groups that wanted to see the spending plan send more state revenue to police, fire and school district coffers hit by an earlier round of budget cuts. To that end, Democrats sought to create a revolving Kids and Communities First Fund, but were unsuccessful.

Under the Democrats' proposal, Kids and Communities First would initially be funded by projected surplus tax revenue and dollars from the state's rainy-day fund then, as an ongoing money source, be funded from Kasich's proposed tax hike on oil and gas extraction.

Kasich wants to hike oil and gas extraction taxes to 4% in two or three years. Energy companies swarming the state in search of new natural gas and oil resources in the Marcellus and Utica shale plays would have the option to waive the tax to offset startup costs. Income tax reductions would begin in 2015, and deepen as proceeds rose.

The oil and gas industry opposes the tax increase as a deterrent to industry growth that Kasich is counting on to improve the state's economy. But the governor has dismissed their concerns, saying they can't get to the oil and gas unless they come to Ohio.

GOP House leaders spun dozens of additional Kasich proposals into separate bills that are pending in committees.

 

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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