Innovation Ohio’s “Taxpayer Rip-Off of the Week” Award: Big Oil Giveaway

For Immediate Release:  May 5, 2011

Contact: Dale Butland, 614-783-5833

Innovation Ohio’s “Taxpayer Rip-Off of the Week” Award

Ohio’s “Marathon Man”

Kasich Gives Oil Companies Multimillion Tax Break;

Rakes in Nearly $150,000 in Contributions

 

Columbus…..Innovation Ohio, a progressive think tank headquartered in Columbus, today presented its coveted “Tax Payer Rip-Off of the Week Award” to Gov. John Kasich for giving oil companies a tax break worth between $5 million and $10 million per year – a giveaway that was opposed by the Ohio business community and even Kasich’s own Tax Commissioner.

Marathon Oil lobbied heavily for the tax break, which exempts exchanges or “transfers” of gasoline from the Commercial Activity Tax (CAT).  It was added to Gov. Kasich’s Transportation Budget (HB 114), which he signed into law on March 30.

Campaign finance records show petroleum interests gave Kasich $116,782 for his gubernatorial campaign, and kicked in an additional $30,000 to the Governor’s “transition fund” after the election.

In a March 4 letter to the Governor, Tax Commissioner Joe Testa warned that “once the state begins to allow exemptions from the CAT…every industry…may ask for a similar exemption or credit.”  Testa also pointed out that lost revenue would have to be replaced by taxpayers.

On March 8, the Department of Taxation’s Deputy Director of Tax Policy and Budget also opposed the giveaway in testimony before the Ohio House, saying that state law specifically identifies such transfers as subject to the CAT, and that allowing this exemption could “start Ohio down a slippery slope” that threatens the CAT’s “integrity and foundation.”  Like Testa, he estimated the cost at between $5-10 million per year, but also noted that making the giveaway retroactive to 2005 could mean far bigger losses for taxpayers.  Retroactivity was included in the bill Kasich signed.

Said IO Communications Director Dale Butland:

“At a time when Ohio consumers are paying over $4 per gallon to fill their tanks-and Marathon Oil made net profits of $2.6 billion in 2010 and nearly $1 billion more in the first quarter of 2011-this giveaway to Big Oil is especially outrageous. Why Gov. Kasich would ignore and disregard his own Tax Commissioner on this issue is a mystery.  An even bigger one is why he thinks Ohio taxpayers can afford to fork over another $10 million a year to the oil companies.”

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