Tax Issue Shades Gov.’s Green Pledge

On the eve of a major speech about the need for protecting the environment, Gov. Arnold Schwarzenegger is coming out against a proposed ballot initiative that would tax oil producers to pay for research into alternative fuels, the governor’s office said Friday.

Schwarzenegger has been touting his environmental credentials as he opens his reelection campaign, driving across the state earlier this week in a big green bus decorated with pictures of Yosemite. He is due to give a speech on the environment Sunday afternoon at a conference of Western governors in Sedona, Ariz.

Schwarzenegger won’t endorse the initiative because it would impose a $400-million extraction tax on oil companies, a move at odds with Schwarzenegger’s position that tax increases would hinder California’s economic recovery, the governor’s office said.

Schwarzenegger “believes oil companies must invest their record profits toward new research in addressing the nation’s dependence on oil,” said Adam Mendelsohn, the governor’s communications director. “However, the governor does not support new taxes.”

A spokeswoman for the initiative predicted the measure would pass despite Schwarzenegger’s opposition.

“The governor and Big Oil are on the wrong side of this issue,” said Julie Buckner of the California Clean Energy Campaign. “And we believe that in November they’ll find themselves quite alone, because voters in California strongly favor cleaner air, cheaper fuel prices, greater energy independence and less profit for Big Oil.”

Some environmentalists said the governor’s stance is worrisome, suggesting he won’t support environmental policies opposed by business interests that are a prominent part of his political and fundraising base. The oil industry has contributed about $1.7 million to the governor’s campaign accounts, with nearly $600,000 of that coming from Chevron Corp. alone, state records show.

Schwarzenegger is conducting a major fundraising effort. His goal is to collect $50 million for his reelection campaign and $25 million for the California Republican Party.

As gas prices have soared, Schwarzenegger has criticized the oil industry for its huge profits. He has directed his staff to investigate possible price gouging in the state, and findings are due next week.

“It’s very disappointing that the governor would side with the oil companies against clean, renewable fuels,” said Sierra Club lobbyist Bill Magavern.

Oil industry officials said the governor is merely acting on a long-held conviction that new taxes would prove damaging. One of Schwarzenegger’s campaign messages is that Democratic gubernatorial candidate Phil Angelides -- who wants to raise taxes on Californians who earn more than $500,000 a year -- is out of step with voters leery of tax hikes.

Jack Coffey, government affairs manager for Chevron, said the governor’s stance “just fits in with his stated pledge that he’s not going to raise taxes.”

Those who are bankrolling the campaign include Hollywood producer Steven Bing, along with Silicon Valley business leaders and pro-environmental corporate executives.

Proponents say they have gathered more than enough signatures required to get the initiative on the November ballot. The secretary of state’s office is now checking the validity of the signatures.

Angelides, who has endorsed the initiative, said it is needed because California is alone among oil producing states in not imposing an extraction tax, a distinction he says the state cannot afford.

Oil producers should be charged a fee for “taking a natural resource out of the ground that, in many respects, belongs to every one of us,” Angelides said in an interview. “This is classic Arnold Schwarzenegger. He drives around the state this week in a green bus, but then he sides with Big Oil and walks away from the fight against global warming.”

In his speech to the governor’s conference, Schwarzenegger will urge his colleagues to set targets and timelines for reducing greenhouse gas emissions. Scientific studies have concluded that such gases are causing global climate change.

Schwarzenegger administration officials were optimistic that he had enough votes to pass a first-ever resolution by all the Western governors declaring that climate change exists, that it is caused by human activity, and that concrete steps should be taken to address it.

Environmental protection is a major Schwarzenegger campaign theme. He changed one of his official campaign colors to green, symbolizing what he says is his commitment to the issue.

Asked about the new campaign colors in a recent news conference, Schwarzenegger said: “What we’re trying to sell here is the idea that we can have economic growth and at the same time that we can protect the environment.”

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Times staff writers Janet Wilson and Dan Morain contributed to this report.