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Send the Oil Severance Back to the Voters

by: Brian Leubitz

Tue Oct 27, 2009 at 09:15:01 AM PDT

treadmill Pictures, Images and PhotosOver in the Legislature, two Assembly members are working valiantly to institute a oil severance tax in the rat wheel that is also known as our Legislature.  Round and round they go. How they hope to get 2/3, nobody knows. Yet, clearly it is important that the issue continue to come up in the Capitol's conversation, so that much makes these bills worth the time.

As oil companies continue to reap record profits amid strained state revenues, a pair of Democratic lawmakers are hoping to tap into their deep pockets by installing an oil severance tax that could relieve growing pressures to cut more state services.

Assemblyman Pedro Nava, D-Long Beach, introduced a bill Monday called the Fair Share Act, that would impose a 10 percent oil severance fee on extractions from California wells to bring in $1.5 billion to the state's coffers.

A similar bill that has already cleared one committee, by Assemblyman Alberto Torrico, D-Fremont, would impose a 9.9 percent fee, but would earmark the revenues to higher education funding. (CoCo Times 10/27/09)

But the fact is that there is never going to be 2/3 to get any oil severance tax out of the Assembly, let alone through both houses of the Legislature.

If the oil severance, or really any taxes, are going to be passed, it is going to require, for the time being, to go to the voters.  The oil severance tax is supported by majorities in most polls. It will not be an easy campaign, as we saw from Prop 87 a few years ago. The oil companies will spend whatever it takes to avoid paying oil severance.

Yet we cannot continue to be the one state that doesn't charge oil severance. If there is going to be drilling in the state, the state should get something back to not only mitigate the costs of that drilling, but to also ensure that there is something left when the drilling is over. To ensure that when the oil companies leave the state, as is bound to happen, that we are left with an education system that can build innovators for the future.

It will take a strong case laid out by Democrats and other progressives, but as a Texan whose education was subsidized by such a tax, it is something that we have to do.

Brian Leubitz :: Send the Oil Severance Back to the Voters
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Disclosure (0.00 / 0)
As these Assembly members are also running for Attorney General, I should mention that I'm doing some work for Kamala Harris's campaign for Attorney General.

I think?

Oil Severance Tax Initiative is a no brainer (0.00 / 0)
This needs to be on the ballot.

First, it's just good policy. Second, and probably more to the point, it's great politics.

re: Oil Severance Tax Initiative is a no brainer (0.00 / 0)
Agreed, The state needs the money, badly, But of course the Wingnuts and their stripped threads will be against It, As they are against anything like this I'd think.

[ Parent ]
Yet another reason why we need a 58 county strategy. (0.00 / 0)

[ Parent ]
Well (0.00 / 0)
I'm not sure that this argues for a 58 County strategy specifically, or at least that it argues for a 58 county strategy more than any other issue. The 58 county strategy is fine and well, but it doesn't help when there's no messaging whatsoever.

We've not really focused any attention on messaging for these purposes, and that's where we'll need to improve if we are to make headway on this issue.

I think?

[ Parent ]
Apologies for being a little too terse earlier: day job interfered. (0.00 / 0)
We need a 58 county strategy because we'll never be able to get a 2/3 vote as long as more than 1/3 of the legislature is controlled by people who will vote no on any new tax, no matter how reasonable it is.  On the oil tax specifically and on all new taxes generally, we have two approaches to solving the problem: change the rule, so that we don't need a 2/3 majority, or work within the boundaries of the rule, and get a 2/3 majority.  If we work within the boundaries of the rule first, we'll be able to change the rule.

As for messaging on the specific issue, it's a no-brainer to me: we're the only state that doesn't tax oil when it comes out of the ground, compared to Alaska, which taxes oil so much that it gives free oil tax money away to all its residents.  Free money.  Perhaps have 25% of the money go into a Permanent Dividend Fund (free money), 25% to schools, and 50% go to the state?

[ Parent ]
Taxes on ballot (0.00 / 0)
  The key is to designate a target for new taxes.  Steinberg's surcharge on those making more than 1 millin dolalrs a year passed because the money was earmarked for mental health. The oil severance taxed failed because the money wsa to go to the general fund. Earmarking it for education will help ensure it passes.

And further balkanize the budget (0.00 / 0)
tax-and-budget ballot-box earmarks are a large part of the existing problem.

[ Parent ]
balkanization (0.00 / 0)
  In a perfect world I would agree with you, but let's face it--the dems aren't even going to qualify an initiative on
the 2/3rds, taxes or budget.  We need more revenue, so
any way we can get it through the current morass has
to be considered.  This is apparently the only way.

[ Parent ]
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