Governor John Kasich discusses at length his plan to use tax on fracking to cut Ohio's income tax

COLUMBUS, Ohio - Should a new tax on fracking in Ohio be used to lower the income tax paid by working Ohioans? That’s what Ohio Gov. John Kasich would like to see happen.

Under the state’s current severance tax, for every $100+ barrel of oil that is produced in Ohio the state gets just 20 cents. For the natural gas liquids that will come from fracking, the state right now would get nothing.

“That’s ridiculous,” said Kasich. “So what I'm saying to these companies and my friends in the legislature is look we modernize the severance tax, boost it up to a reasonable amount where companies can recover their costs. Don't make it too high and then take all those dollars and reduce the income tax in Ohio."

The reason it's important Kasich said is you want the dollars circulating in Ohio.

"You don't want them going back to Texas or Oklahoma or China or wherever. Secondly, it will help small business and it will help families and it's just a tremendous opportunity for the state of Ohio for its long term economic security."

The problem he faces is not so much with Democrats in the legislature but with members of his own party -- some of whom are against any new taxes on this powerful industry. The governor said they can afford it.

“One of the companies said they expected a total of a trillion dollars out of the state. At a 4-percent severance tax, that's $40 billion of tax relief, if that’s what happens. Now nobody quite knows what's under the ground, but the companies have made in the last week or so a billion and a half dollars worth of investment. They know there’s gold in them thar hills,” he said.

Going after a new industry for additional revenue is nothing new for Kasich, who went after the casinos last year for additional fees.

"You know they didn't want to give any more and they ended up giving," he said. Just like in that case, he believes there’s a happy medium.

“We want the jobs we don't want to damage the new industry but you know what every Ohioan's got to benefit," he said.  "What I told them is hey we get this done, we'll be done and we're not going to keep coming back and trying to take more from you but we need this."

In the end, he believes his proposal is one that benefits everyone, something he hopes in time the legislature realizes.

“We've given them a 3,500 page bill and they're working their way through it and you know patience at this point is a good way to think about this,” he said.