One thing is this: The oil and gas lobby has nothing to fear from the House GOP caucus. The other thing is this: Neither does the tobacco lobby.
The severance tax Ohio charges on gas and oil produced in Ohio is laughable. Kasich has proposed a package of reforms that, to use a shorthand term, includes a fracking tax. The Kasich administration’s estimate, relayed by the Legislative Service Commission, is that his severance tax package would produce an additional $76.5 million for the General Revenue Fund next fiscal year — that’s $6.60 per Ohioan — and an additional $183 million ($15.78 per Ohioan) in the second year. The GRF is state government’s checking account.
On Tuesday, Rosenberger’s Republicans said “no way” to Kasich’s severance tax plan. Two days later, on Thursday, the Wall Street Journal reported that “oil prices hit a high for the year.” Connection? No. Irony? Yes.
On tobacco, Kasich, according to the Legislative Service Commission, wants to increase Ohio’s cigarette tax, now $1.25 a pack, to $2.25 a pack. The increase would boost the General Revenue Fund by $415 million in the year beginning July 1, then by $337 million the following year. Ohio House Republicans again said no.
Kasich also wanted to boost taxes on other tobacco products, too, and start taxing “vapor products containing, made from, or derived from nicotine” — e-cigarettes. Nope, Ohio House Republicans said, also on Tuesday. And the ironies keep on coming: Thursday, the federal Centers for Disease Control and Prevention reported that “e-cigarette use among middle and high school students tripled from 2013 to 2014.” And the Wall Street Journal reported in January that, according to Wells Fargo & Co. analysts, “U.S. e-cigarette sales … are expected to surpass $3.5 billion this year.”
True, consumers pay tobacco taxes, first in dollars, then in health. Higher Ohio tobacco taxes might cut Ohio smoking, or reduce stops at Ohio convenience stores, however. Heaven forfend, though, that Ohio should crimp the free enterprise system: After all, Altria (Marlboros; MarkTen e-cigarettes) only produced “total shareholder return of 34.5 percent” last year, while Reynolds American (Camels; VUSE e-cigarettes) reported total shareholder return “just under 35 percent for 2014.” Take a bow, Ohio House Republicans.
There are plenty of other things to criticize in Kasich’s plan, notably a bid by the governor to increase Ohio’s statewide sales tax from 5.75 percent to 6.25 percent. Rosenberger’s caucus said no. That’s commendable. But the deference that Ohio House Republicans’ budget rewrite gives to Big Oil, Big Gas and Big Tobacco? That’s nauseating.