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A signature part of Gov. John Kasich's budget proposal is the reduction in the state's income tax that he has long promised.
To help pay for it, Kasich proposes to increase severance taxes on oil and gas drillers. The proposed changes target larger drilling companies and are meant to allow Ohio to share in the wealth from horizontal drilling in the Utica Shale formation.
Kasich first proposed the plan in 2012. GOP legislative leaders refused to consider raising taxes on the oil and gas industry, however, which led Kasich to say Republican lawmakers had been influenced by "special interests" -- meaning the lobbies associated with the oil and gas industry.
That was one year ago. At that time, Mike Dittoe, a spokesman for House Speaker William G. Batchelder, said that removing the tax plan from Kasich's midterm budget review did not mean the issue was rejected or dead. Dittoe said GOP members of the House only wanted more time to study the issue.
By last December -- when Kasich held his annual year-end review at the Statehouse, with Batchelder seated beside him -- it appeared that the issue was near resolution.
Though Batchelder's chamber had refused to take up the tax proposal in 2012, the Medina Republican predicted it would win approval this year.
"I don’t think there’s any question we ultimately will support it," he said.
Then came this month’s three-day winter meeting of the powerful Ohio Oil and Gas Association, where Batchelder spoke out against Kasich’s tax plan and called it "nonsense."
"Let me just say to you," the Coshocton Tribune reported him saying, "that, as long as I’m there, we’re not going to be doing the kinds of things to damage an industry that are among the proposals that have been made."
Batchelder confirmed to the newspaper after the event ended that he will not support Kasich’s tax plan, calling it "a big mistake," and saying lawmakers would have to find another way to achieve Kasich’s stated goal of slashing income taxes for small-business owners by 50 percent and for all individuals by 20 percent.
"I don’t know that that’s the only thing that can lead to an income tax cut," he said.
Had Batchelder's position changed? What was it? PolitiFact Ohio asked Mike Dittoe.
"No, the Speaker’s stance has not changed on the issue of the severance tax," the spokesman responded in an email similar to one reported in the publication Columbus Business First.
"Speaker Batchelder has voiced his reservations about the severance tax for months, dating back to 2011 and 2012 … He has always maintained a commitment publicly and privately to Gov. Kasich to closely examine the severance tax and all other proposed tax reform issues contained within the state budget and beyond.
"When the Speaker indicated the severance tax would be accomplished in December," Dittoe continued, "he said that in the context, as he has previously, of an overall conversation about tax reform in Ohio. Since early February, the Speaker and members of the House have had some time to review the proposed severance tax language as provided by the Governor – the majority caucus still has reservations on this proposed language …
"The Speaker has always maintained that the targeting one specific industry for tax revenue is problematic and he wants to work with the business community in the hopes that they will coalesce around an overall tax reform proposal, which would be far more acceptable. The Speaker made a commitment to work with the Governor to accomplish a severance tax proposal last year, but still has concerns on this severance tax language proposed."
Dittoe also noted that "we are very early in the ball game" -- meaning less than three months into a two-year General Assembly -- and "final determinations on any component of the budget have not yet been made."
Batchelder "never set a timetable to accomplish the severance tax issue, only voiced concerns about the proposal before us," Dittoe said. "It is certainly possible that other proposed language will be something that the legislature will agree upon in the near future, inside or outside of the budget."
PolitiFact agrees it is still early in the 130th General Assembly. Proposals will change, positions will be modified and alliances will shift.
The effect of Batchelder’s position on Kasich’s oil and gas tax may not have changed over the past year, but his tone and words about it have shifted several times. He may have the matter under judicious consideration, as Dittoe indicated, but the direction in which he is leaning and his level of certainty have changed significantly with his audience and circumstances.
We call that a Full Flop.
The Plain Dealer, "Kasich suddenly faces a lot of Republican resistance," March 16, 2013
The Plain Dealer, "Answers to some of your questions about John Kasich's budget plan," Feb. 5, 2013
The Plain Dealer, "Gov. John Kasich to propose new tax on fracking to give Ohioans a personal income tax cut," March 4, 2012
The Plain Dealer, "Gov. John Kasich's drilling tax proposal will get consideration, but no commitment, at the Statehouse," April 12, 2012
The Plain Dealer, "Ohio Gov. John Kasich, with opposition from all angles, renews call for drilling tax hike to back income tax cut," July 13, 2012
The Plain Dealer, "Wary of a tax hike on drillers, GOP lawmakers remove Gov. John Kasich's income tax cut from budget proposal," March 16, 2012
Columbus Business First, "Batchelder hints at support coming for Kasich fracking tax hike," Dec. 19, 2012
Columbus Dispatch, "Kasich’s got plans for ’13," Dec. 20, 2012
Coshocton Tribune, "GOP opposition has Kasich's frack tax in trouble," March 8, 2013
Akron Beacon Journal, "Two key Ohio Republicans oppose Kasich’s tax proposal on drilling," March 11, 2013
Columbus Business First, "Batchelder’s renewed opposition to frack tax spells trouble for Kasich," March 12, 2013
Email from Batchelder spokesman Mike Dittoe, March 20, 2013
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