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Evans bill would tax oil producers

To fund higher education, state parks

Sen. Noreen Evans, D-Santa Rosa, announced the introduction of SB 241, a bill that would fund California’s higher education systems and state parks through a severance tax imposed on oil producers in California.

“California is the largest – and only – oil producing state in the nation that does not tax its vast oil resources,” said Evans. “Those are unrealized revenues we can, and should, use to endow our core services of government by fulfilling our commitment to higher education and similarly, preserve our natural resources in state parks by funding them.”

The bill, the California Education and Resources Reinvestment Act (CERRA), has the potential to secure billions of dollars during the estimated course of oil production in California, and was co-authored by Sen. Mark Leno (D-San Francisco), chair of the Senate Budget Committee. The legislation is supported by student, education, tax and environmental groups, as well as California economists.

The California Education and Resources Reinvestment Act would impose a 9.9 percent severance tax on the extraction of oil from the earth or water within California’s jurisdiction, which the Board of Equalization estimates would generate approximately $2 billion a year in revenues. Revenues would be reinvested with 93 percent going to equally fund California’s three higher education systems (University of California, California State University and California Community Colleges) with the remaining 7 percent going to the California Department of Parks and Recreation to support state parks.

Evans said the bill is needed to reinstate funding lost over recent decades in those areas of the state budget. In 2011, public colleges and universities received 13 percent less state funding than they did in 1980 (when adjusted for inflation). In 1980, 15 percent of the state budget went to higher education, but by 2011, the number dropped to 9 percent. Between the 2010-11 and 2011-12 state budgets, another $1.5 billion in funding was cut, the largest reduction of any high-population state in the country. In 2010, California ranked 49th in the nation for the number of students who go straight from high school to college.

According to a recent report by the Campaign for the Future of Higher Education, in order to return the quality and fees (of higher education) to 2000-01 funding levels, it would cost taxpayers $6.405 billion.

“UC students have long called for new revenue dedicated specifically to funding higher education,” said Raquel Morales, UC Student Association president and a UC San Diego student.

Last year, 70 parks in California were targeted for closure while most others are lacking staff and suffering from more than $1.6 billion in deferred maintenance.

“It is time for California to join all of the country’s largest oil producing states in enacting an oil severance tax on big oil companies to mitigate the impact of extraction, protect our environment and public health, and strengthen our economy,” said Bruce Reznik, executive director of the Planning and Conservation League. “Oil extraction can release tremendous amounts of toxins into our air and waters, and pose serious threats to humans and wildlife.”

“California’s oil resources have made trillions-of-dollars in profits for the oil industry,” said Evans. “Imagine what mere billions could do for Californians.”