Southeast : La Habra Heights Voters to Decide Levy on Oil Firms

The taxation of oil production in La Habra Heights will land voters in the middle of a debate over production of the city’s black gold.

The City Council has added a referendum to the March 26 ballot to charge oil companies $500 a year for each well in production, plus a few cents per barrel.

The city already charges the tax. But council members decided to put it before voters after a recent decision by the state Supreme Court that challenges municipal taxes levied without voter approval.

Operators of the city’s 145 oil wells say the tax burden is excessive. Some claim it would eventually force them to close their wells. The tax has generated about $240,000 for the city’s general fund since it was instituted in mid-1994.

City Manager Les Doolittle argued that a tax on oil drilling represents one of only a few revenue sources for the city.

But the chairman of McFarland Energy Inc., which operates about 10 oil wells in the city, said the load is too heavy.

“[The tax] is shortsighted,” J. C. “Mac” McFarland said. “The consequence will be that the operators will stop producing the wells. . . .”