SACRAMENTO — State Sen. Noreen Evans (D-Santa Rosa) on Wednesday revived a proposal to tax oil pumped from the ground in California, saying the $2 billion it would raise annually could help restore the affordability of higher education and improve social services and parks.
Evans introduced legislation that would levy a 9.5% tax on oil companies, noting that California is the only major oil-producing state in the country that does not have such a tax. Alaska charges a 25% tax, while the levy in Texas is 4.75%.
"Meanwhile, our debts grow, our population increases and our services are strained while new revenues from our own natural resources earn $331 million a day for big oil companies," Evans said. "Not taxing oil extraction is simply fiscally unsound.”
The bill would give the University of California, California State University and California Community College systems 50% of the funds to share equally, with health and human services receiving 25% and state parks the remaining 25%.
However, similar tax proposals in California have been defeated in the past by the oil industry.
Evan’s legislation was opposed by Allan Zaremberg, chief executive of the California Chamber of Commerce.
“We just raised California taxes by $7 billion a year for seven years. We now have a projected $5-billion surplus,” Zaremberg said in a statement. “To create a new tax on oil only extracted in California will drive up the price of California oil, which constitutes about 40% of the California gasoline market. “
The measure was also opposed by Californians Against Higher Taxes, a group that includes the oil industry.
“SB 1017 promotes an oil severance tax Gov. Brown has already said he does not support and voters have no appetite for,” said Beth Miller, a spokeswoman for the group that includes the Western States Petroleum Assn., the California Independent Petroleum Assn., the California Retailers Assn., and several other business and taxpayer groups.