State Representative Jack Cera (D-Bellaire) has finalized a severance tax proposal that earmarks a portion of the shale industry’s oil and gas tax for eastern Ohio and uses other proceeds for statewide infrastructure projects.

House Bill 162 creates several programs that address the need for additional funding in the shale area including increasing local government funding for ongoing costs to local governments, water, sewer and highway funding, support for first responders, soil and water districts and additional money for ODOT to use on state highways.

“I believe strongly that some of dollars collected from the severance tax need to be earmarked for infrastructure so we can help our area grow by building new water and sewer projects and repairing existing systems. We should also look at improving our highway systems as a way to attract the new businesses and jobs needed to help the shale industry grow,” said Rep. Cera.  

According to Rep. Cera, his proposal not only makes investments in the Appalachian region of Ohio, it invests in the entire state by allocating money to fund local government infrastructure projects outside the shale region. “It’s a fact that infrastructure projects mean more good paying jobs, and our infrastructure needs are plentiful throughout the entire state,” he said.

Local government funding cuts have had a serious impact on the communities and townships in eastern Ohio, and the bill will provide additional funding to help them with police, fire and other general costs. Funding will also go specifically to programs that fund projects such as state highway repair within the shale region, a grant program for firefighting and EMT equipment in the shale region and to soil and water districts in the shale region. Grant money will also be available for local governments and school districts to help convert their vehicles to compressed natural gas.  Additionally, it assists the Ohio Department of Natural Resources by promoting regulatory programs and an Orphan Well Program.

Cera noted that the Governor’s proposed severance tax proposal was once again removed from the state budget bill, House Bill 64. “I appreciate the effort by Governor Kasich over the past few years to address the severance tax issue, and I look forward to working with his administration to get this done in a way that benefits all of Ohio and the shale industry,” Cera said.

Cera stated that he took the time over the last few months to speak with many interested parties including local government officials, industry reps, farmers and legislators to solidify a proposal that he believes can prove beneficial to all of Ohio.

“Each designated fund has a unique purpose. Each fund would be used for the betterment and enrichment of Ohio and the residents that live here. My proposal not only helps an area of the state with great needs, but aims to put all of Ohio in a better place,” added Cera. 

The tax rate proposed in Rep. Cera’s bill is lower than what was proposed by the Governor in the budget. It will tax production at two percent in the first two years, three percent in the next two years and four percent thereafter. The bill also provides an income tax deduction for landowners whose leases require them to pay a share of the severance tax. It holds local governments and libraries harmless from any revenue loss due to this income tax deduction.


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