SACRAMENTO – A new revenue proposal to fund public education and natural resources in California failed to gain the approval of the Senate Appropriations Committee on Monday.
The bill, SB 241, which would impose a 9.5 percent tax on oil companies for the extraction of oil or gas in California’s jurisdiction, was moved to suspense.
If the committee fails to act on the bill by Friday the bill will become a two year legislative effort.
“Fracking will vastly increase California’s oil extraction and the state is inexplicably poised to give it away for free,” said Sen. Noreen Evans (D-Santa Rosa), the bill’s author. “We should capture some of those revenues through an industry tax to reinvest in education and our own natural resources.”
Unlike the soda and tobacco tax legislative proposals this year, the oil tax proposal is industry specific and not levied at consumers. Moreover, the oil industry, already enriched by unprecedented profits, will swell its environmental footprint and revenues in California through fracking.
California is the fourth largest oil producing state in the nation and the only top ten producer that does not impose an oil severance tax. In Alaska, the tax ranges from 25-50 percent, in Texas it's 4.75 percent and in Kansas, 8 percent.
For years, California has balanced its budget by cutting government spending. As a result, in 2011-12, state spending fell to its lowest level since 1972-73.
Tuition at the University of California and California State Universities increased 310 percent and 283 percent, respectively, in the last decade. Assistance to the aged, blind and disabled was reduced to 1983 levels. The public education sector alone lost 40,000 jobs in the last five years.
SB 241, also known as the California Education and Resources Reinvestment Act (CERRA), would potentially secure billions of dollars in new revenues during the estimated course of current oil production in California.
If fracking in the Monterey shale region is allowed, those estimates would increase significantly. Revenues would be divided with 93 percent of the new revenues to fund the public education system and the remaining 7 percent going to state parks.
A grassroots, student-led group, the California Modernization and Economic Development Act, is also gathering signatures to qualify a similar initiative for the 2014 ballot. This year the California Democratic Convention voted to endorse an oil severance tax policy.
“Californians elected us to govern,” continued Evans. “It would be irresponsible of us to leave billions – possibly trillions – of dollars on the table while we lament the austerity budgets of the last few years and when we lack current funding to restore core service programs.”
State Senator Noreen Evans represents the Second Senatorial District, including all or portions of the Counties of Humboldt, Lake, Mendocino, Marin (caretaker), Napa, Solano and Sonoma. Senator Evans Chairs the Senate Committee on Judiciary.