COLUMBUS, Ohio - State Rep. Jack Cera reintroduced legislation this week that would give oil and gas companies a $2,500 tax credit for each Ohio resident they hire, but the measure does not have the support of Gov. John Kasich.
The Kasich administration opposes giving tax credits to industries, said spokesman Robert Nichols. The governor's office instead wants to know what skills Ohioans need to make them more employable the oil and gas industries.
"We met with him (Cera), and we suggested he go back to the industry to see what else could be done," Nichols said. "The governor has been very vocal about the industry not hiring enough local people, though some companies have been better than others.
"We're only in year two or three of a 25-year shale play, and we have to have our workers up and running," he continued. "If they do not have the skills, let us know so we can establish programs in our technical schools so they can get the skills. It's very important."
House Bill 63, introduced by Cera, D-Bellaire, and Rep. Sean O'Brien, D-Hubbard, would establish a nonrefundable commercial activity tax credit for companies involved in horizontal well drilling or related oil and gas production services that hire Ohio residents or dislocated workers in the state who have enrolled in or completed a federally registered apprenticeship program.
Cera said the language adding "dislocated workers" was the only change made to the legislation he first introduced in July 2012 during the last term of the Ohio General Assembly. Dislocated workers, as defined under the federal Workforce Investment Act, are those who have been terminated or laid off following a long tenure with an employer.
The change is intended to encourage oil and gas companies to hire these workers while they are still receiving training, he said.
HB 63 would give employers in the industry a $2,500 tax credit for each Ohio resident they hired as a full-time employee during the past tax year. The credit would apply to owners of horizontal wells and other companies performing drilling, pipeline transportation, processing or construction services related to horizontal wells.
Under the measure, eligible employees must work in the oil and gas industry for at least three consecutive months at a rate of pay of at least 250 percent of the federal minimum wage, and they must have completed or be in enrolled in a federally registered apprenticeship program. An Ohio resident is defined in the bill as someone who has lived in the state for at least six months and who pays state income taxes.
Cera said Kasich and his staff "weren't receptive" to the legislation and asked him "to go back to the industry and see what else they might accept instead of a tax credit."
"He doesn't want to provide companies with any tax credits," Cera said of Kasich. "But we fall all over ourselves in other parts of state when an IT (information technology) center or distribution center wants to come in. We've provided millions and millions of dollars for these companies in income tax and property tax abatements, but when we are having something down in our part of the state, they are not receptive to giving tax breaks to companies.
"We've wasted a lot more money on industries that have moved in and left us. ... My guess is if there were something in Cleveland, Cincinnati or Columbus, they would be falling all over themselves to give tax credits."