Oil and soda taxes advance in California Legislature

An oil derrick on the southwest corner of Atlantic and Spring Street in Long Beach. A proposed 9.5% oil extraction tax would raise $2 billion annually for public education and state parks.
(Luis Sinco / Los Angeles Times)

SACRAMENTO -- Two controversial tax measures advanced Wednesday in the California Legislature — a penny-per-ounce levy on soda and a charge on oil pumped from the ground in the state.

The Senate Health Committee members approved a bill by state Sen. Bill Monning (D-Carmel) that would charge the tax on sweetened beverages, including sodas, in hopes of reducing obesity among young people.

The $1.7 billion that would be raised would go to a Children’s Health Promotion Fund to support a statewide program to prevent obesity in children. Monning said the tax in SB 622 would also reduce consumption of high-calorie drinks by children.


“We’re in the midst of a public health crisis fueled by childhood obesity,” Monning said. “This legislation sets an alternative path toward health and wellness.” The bill received enough votes in committee with only Democrats in support. It still requires approval by the full Senate and Assembly.

The measure was opposed by a food industry group, the Center for Consumer Freedom.

J. Justin Wilson, a senior research analyst for the group, said the tax is “nothing more than a money-making exercise for California’s cash-strapped government,” and that it will have “little to no effect on Californians’ waistlines.”

The 9.5% oil extraction tax would raise $2 billion annually for public education and state parks and was approved by the Democrats on the Senate Governance and Finance Committee, which sent it to the Appropriations Committee.

Senator Noreen Evans (D-Santa Rosa) authored the measure, noting that California is the fourth-largest oil-producing state in the nation and the only top 10 producer that does not impose an oil severance tax.

“It’s time for California to profit from its limited natural resources and reinvest in our core services,” Evans said. “We’ve cut to the bone to balance the budget for the last several years; meanwhile oil companies reap billions of dollars in profits every year.”

A business-backed group called Californians Against Higher Taxes opposed the bill.

“These types of targeted tax increases will throw billions of dollars at Sacramento politicians to waste with no accountability,” said Beth Miller, a spokeswoman for the group.



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