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Oil-extraction tax measure dies, but will return

By Josh Richman
Tuesday, September 24th, 2013 at 10:07 am in ballot measures, education, energy, taxes.

A student-led campaign to put an oil-extraction tax ballot measure before California voters has failed – and is starting all over again with renewed vigor.

Monday was the signature-gathering deadline for the “California Modernization and Economic Development Act,” a measure conceived at UC-Berkeley that would’ve imposed a 9.5 percent tax on oil and natural gas extracted in the state. Petition circulation began April 25, but the proponents couldn’t hit their 504,760-signature mark.

But Californians for Responsible Economic Development, the student-led group that drafted the initiative, plans to resubmit a revised measure.

California oil wells“This summer has been busy for the CMED team,” said Aaron Thule, the campaign’s grassroots coordinator. “After a lot of hard work, we have built a signature gathering coalition for fall and winter that will be ready to activate and qualify this initiative come November.”

The tax would’ve raised an estimated $1.5 billion to $2 billion per year. In its first decade, 60 percent of its revenue would’ve been split equally among K-12 education, community colleges, the California State University system and the University of California system; 22 percent would’ve gone to clean-energy projects and research; 15 percent would’ve gone to counties for infrastructure and public health and safety services; and 3 percent would’ve gone to state parks. After the first decade, 80 percent would’ve gone to education, 15 percent to counties and 5 percent to state parks.

The revised initiative will have a sliding scale tax of 2 percent to 8 percent, which the proponents say will protect small business owners and jobs while still bringing in about $1 billion per year.

The revised initiative also will change the revenue allocation: 50 percent would be put in a special 30-year endowment fund for education, which after three years would start paying out equally to K-12, community colleges, CSU and UC. The proponents predict that after 30 years of collecting interest, it would bring in as much as $3.5 billion per year for education.

Another 25 percent would provide families and businesses with subsidies for switching to cleaner, cheaper energy, and the final 25 percent would be put toward rolling back the gas tax increase enacted last July, to make gas more affordable for working-class Californians, the proponents say.

Working to qualify the measure by early spring will be the University of California Student Association, groups at San Francisco State University, Sonoma State University, CSU Bakersfield and several community colleges. California College Democrats and California Young Democrats, both of which have endorsed an extraction tax for education and clean energy, are also lending support.

“It’s hard to believe that California is the only state that practically gives away our energy – especially when, as a state, our schools and colleges continue to struggle and we have yet to provide adequate funding to meet our own renewable energy standards,” College Democrats President Erik Taylor said.

The UCSA, representing hundreds of thousands of UC students, plans to organize across several campuses. “Affordability and funding are critical issues at the UC and Prop 30 simply is not the solution in itself that we need,” UCSA President Kareem Aref. “Our campaigns for this year are designed to ensure a stable and long term funding stream for the UC.”

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  • Mogumbo Gono

    These truly ignorant students need to read “The Broken Window Fallacy” essay by economist Frederic Bastiat: http://tiny.cc/7rox3w

    Every dollar confiscated in taxes directly harms society. The oil is not “our oil”; it is the property of the owners of the resource, who honestly bought it in a free market environment, where any buyers could bid on it.

    These grasping students could become owners of that oil by simply buying shares in the companies, and then giving their profits to the State.

    But like conniving Statists everywhere, they want to forcibly confiscate property owned by others, and hand it over to their favorite special interest group [politicians] without paying for it.

    Where I come from, they would properly be called “thieves”.

    Make no mistake, either: the average person’s money and property is also on their list of items to confiscate. You think your retirement savings are safe from thieves like them? Think again: in their perverted way of thinking, what is yours belongs to ‘society’.

    It is no longer your exclusive property; it is everyone’s property. Just like your neighbor’s oil in the ground. There is no difference. They intend to steal it from you.

  • Elwood

    what Mogumbo said!

  • Elwood

    what Mogumbo said!

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  • Nicko Thime

    “free market environment,” Biggest lie ever.

  • Pingback: CA: Could the oil tax bill be a shill for a ballot initiative? | Watchdog Wire - California