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Democratic Ohio gubernatorial candidate Ed FitzGerald believes Ohio shouldn’t have a set oil and gas severance tax, but rather each energy company should pay a rate largely based on how many state residents they employ.
FitzGerald serves as Cuyahoga County executive. He faces Republican Ohio Gov. John Kasich in the Nov. 4 general election.
House Bill 375, being considered by the Ohio Senate, would set the state’s oil and gas severance tax at 2.5 percent, though Kasich has urged the rate be higher so a greater amount in income tax cuts can be awarded to residents across Ohio.
FitzGerald instead wants the rate to be a negotiable one with energy companies based on a number of criteria, one of which is how many Ohioans they have hired.
“I don’t have a rate because I think it has to be negotiated,” he said. “There are two pieces of the puzzles not included in the formula. … It should depend on how many Ohio residents have been hired – a sliding scale based on that. And secondly, we need to sit down with the local townships, counties, communities, community development corporations and say what do you need to develop economically this part of Ohio. We need to figure out what are the infrastructure and small business needs, and share this revenue with them.”
The state doesn’t have a reinvestment strategy, according to FitzGerald.
“We don’t want to be 10 years down the line, when the resources are 20 years down, and the community is back where it was before,” he said. “That’s happened before in Ohio history.”
FitzGerald said he has spoken with local residents, who tell him the oil and gas boom is a once in a lifetime opportunity to re-invent East Ohio’s economy, infrastructure and schools.
“I’m supportive of oil and gas drilling, and expanding that,” FitzGerald said. “I differ with some people in my political party on that, but I think it’s a great opportunity for the people in this part of the state.”
FitzGerald said he disagrees with Kasich about increasing costs to the oil and gas industries through the raising of the severance tax.
“(Kasich) basically is increasing the cost on the exploration and production,” Kasich said. “He is taking almost all of the monies and sending it to Columbus – rather than investing in local communities – and that’s a mistake.
“And number two, I’ve always said the tax rate – whatever tax rate exists on oil and gas – should be tied to the number of Ohio residents a company actually hires, and that they could get a credit on their taxes if they train and hire Ohio residents for those jobs. I’ve talked to people in the oil and gas industry, and they are open to that concept.”
FitzGerald said there are environmental issues associated with oil and gas drilling, and Ohio should focus its regulatory policies regarding the industry on public health issues.