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Students to push Legislature for oil-extraction tax

Its proposed measure having failed to get enough signatures to qualify for the ballot, a student-led group calling for California to implement an oil-extraction tax will try its fortunes with the Legislature again.

Californians for Responsible Economic Development will change its name to Students’ Voice Now, and will soon announce a partnership with two state senators to get a bill or legislatively referred initiative passed in the Legislature next year, spokesman Kevin Singer said.

“The framework of the bill is expected to include an endowment for education, but also may include subsidies for families and businesses to switch to cleaner forms of energy, a rollback of the gas tax, and/or immediate revenue for the specific purpose of decreasing college tuition across California,” Singer wrote in an email.

Singer said that starting in January, as part of pushing for the bill, they’ll keep networking across California’s college campuses and “continue to build relationships with other interest groups, PACs, and legislators who believe that whether oil is drilled or fracked from our soil, Big Oil needs to pay its fair share.”

California is the only oil-producing state that doesn’t have a specific oil-extraction tax, and the proponents estimated the tax contemplated by their now-dead proposed ballot measure would’ve raised $1.5 billion to $2 billion per year.

But any such legislation probably faces a tough road ahead in the Legislature. State Sen. Noreen Evans, D-Santa Rosa, this year carried SB 241 to establish an oil-extraction tax, but the bill never made it out of the Senate Appropriations Committee.

Gov. Jerry Brown has pledged not to raise or create any taxes without voter approval, and so might push hard against any efforts to create this tax by legislation alone. And he probably won’t want a legislatively directed tax hike on the same ballot in which he’s (presumably) running for re-election in 2014.

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Oil severance tax measure to start circulating

A proposed ballot measure to enact an oil severance tax, with most of the revenue spent on education, has received its official title and summary and is about to start circulating for petition signatures.

California oil wellsConceived by UC-Berkeley students, the California Modernization and Economic Development Act places a 9.5 percent tax on oil and gas extracted from California; supporters say it would bring about $2 billion of new revenue per year. Of that, about $1.2 billion would be allocated in four equal parts towards K-12 education, California Community Colleges, California State University and the University of California.

Another $400 million or so would be used to provide businesses with subsidies for switching to cleaner, cheaper forms of energy, and about $300 million would go to county governments for infrastructure repair, public works projects, and funding public services.

Californians for Responsible Economic Development, the group behind the measure, has 150 days to collect 505,000 signatures in order to qualify it for the 2014 ballot. The group says it’ll do both grassroots organizing and fundraising for paid signature gathering.

California over recent decades has seen many legislative bills and ballot measures – either proposed, or unsuccessful with voters – to impose such a tax. More than 30 states have oil and gas severance taxes, but opponents say such a tax could reduce California’s oil production, costing jobs.

Former U.S. Labor Secretary Robert Reich, now a Cal professor, endorsed the effort in February, saying using oil severance tax revenue for education “should be a no-brainer. It will only improve our schools. The real question is why California hasn’t done this long before now.”

The measure last week won support from state Senator Noreen Evans, D-Santa Rosa, whose SB 241 would impose an oil severance tax to fund education and parks in California. She said she supports any effort to let “California to collect on these vast and irreplaceable natural resource revenues that should fund one of the most important core services of government – education. It’s past time California ends the oil industry’s free ride and finally sets a solid revenue stream towards funding government’s education obligations.”

CMED campaign manager Jack Tibbets, a junior at Cal, said his staff will be working closely with Evans’ office. “Should the Senate fail to vote and pass SB 241, our campaign will work with public officials, donors, interest groups and students to produce an extraction tax for the 2014 ballot.”

Here’s the official title and summary issued today by the state Attorney General’s office:

TAX ON OIL AND NATURAL GAS. REVENUES TO EDUCATION, CLEAN ENERGY, COUNTY INFRASTRUCTURE AND SERVICES, AND STATE PARKS. INITIATIVE STATUTE.
Imposes 9.5% tax on value of oil and natural gas extracted in California. During first ten years, allocates revenues: 60% to education for classroom instruction (split equally between UC, CSU, community colleges, and K-12 schools); 22% to clean energy projects and research; 15% to counties for infrastructure and public health and safety services; 3% to state parks. Thereafter, allocates 80% to education, 15% to counties, and 5% to state parks. Prohibits passing tax on to consumers through higher fuel prices.
Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Increased state revenues from a new oil and gas severance tax of $1.5 billion to $2 billion per year initially (which could either grow or decline over time), to be spent on public schools, colleges, and universities; clean energy research and development; local infrastructure projects; and state parks. (13-0002.)