Kasich, a Republican, unveiled a sweeping 759-page budget proposal Monday that would reduce small business taxes and expand social services. Some of that budget would be supported by an increase in taxes for oil and natural gas drillers.
He said the tax reform proposal would make Ohio more competitive by shifting the tax burden from income to consumption.
"It also takes advantage of the discovery of significant oil and gas reserves in the Utica shale formation to cut taxes for all Ohioans," he said in a statement.
The Ohio Petroleum Council said that while state constituents deserve to benefit from the state's energy sector, "the last thing Ohio's economy needs is a hefty tax increase that will harm job growth."
OPC is a division of the American Petroleum Institute, the energy industry's lobby. API last month pointed to a report from consultant company IHS that stated unconventional oil and natural gas development has contributed to economic recovery in U.S. states with abundant reserves.
State Tax Commissioner Joe Testa was quoted by Bloomberg News as saying the governor's tax proposal reflects "the realities of the economy."