Ohio drillers say 6 shale counties saw $43M tax bump

Oil-and-gas drillers in Ohio have paid $43 million in property taxes to local governments and schools in six shale counties since 2011, according to a report released Thursday.

The finding by the Ohio Oil and Gas Association and Energy In Depth Ohio, a natural-gas research and education group, comes as Republican Gov. John Kasich has renewed calls for a severance-tax increase on the industry.

Kasich's proposed two-year, $66.9 billion operating budget raises $448 million from the severance-tax increase. The increase would combine with other tax reforms to pay for a net statewide income-tax reduction of $39 million.

Thursday's report shows Belmont, Carroll, Harrison, Noble, Monroe and Guernsey counties have seen a combined 22 percent revenue boost from the longstanding ad valorem real estate property tax, amid a 35-fold increase in natural gas production.

"I've heard from many county commissioners and other elected officials, community leaders in eastern and southeastern Ohio, who've told me that they've had their budgets saved, thanks to the millions of new tax dollars rolling into their coffers," said U.S. Rep. Bill Johnson, a Marietta Republican whose district spans much of Appalachian Ohio.

The industry projects that continued growth will allow the same tax to generate between $200 million and $250 million over the next 10 years.

Energy In Depth state director Jackie Stewart said counties have the opportunity to build a coordinated regional growth strategy based on those estimates. She said the tax has been misunderstood and hard to track, so her organization took the initiative to sort out the information and provide it to the counties.

Shawn Bennett, executive vice president of the Oil and Gas Association, said Kasich's tax proposal could negatively impact an industry that's already giving money back to the communities.

"Any time you raise taxes on an industry, there is going to be consequences," he said. "In this instance, you're going to see less drilling, less development of natural resources. So there's going to be less wells drilled, and less wells drilled on the fringe counties."

Kasich argues the industry's operations in Ohio's lucrative Utica Shale play is strong enough to sustain a severance tax increase.

His fellow Republicans in the state Legislature have shown little appetite to approve the tax increase.