Bill would tax oil companies for school revenue

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SACRAMENTO Standing in front of Eureka High School Friday, Assemblywoman Patty Berg called for a tax on oil production in California that could raise $1.2 billion a year and prevent school districts from laying off thousands of teachers across the state.


“We’re the only oil-producing state in the nation that doesn’t tax oil extraction,” said Berg, D-Eureka. “That doesn’t make sense. And it’s especially obscene at a time that districts around the state are sending pink slips to teachers.”


Berg called on Republicans to rethink their opposition to Assembly Bill 9XXX, which would impose a 6 percent tax on oil pumped from California land or coastal waters.


It also would impose a windfall profits tax on oil company revenues. All totaled the tax package would raise about $1.2 billion, all of which would be dedicated to California’s schools.


Before supporting the bill, Berg and fellow Democrats insisted it include a clause that would forbid oil companies from passing the tax on to consumers.


The measure gives the state’s tax agencies the power to scrutinize oil company expenses to look for evidence of price gouging.


California, pummeled by a collapsed housing market and soft economy, is in the midst of a serious budget crisis. The Legislature and the governor already have cut a $16 billion deficit in half, but they now face a series of bad choices to close the remaining $8 billion gap.


The governor has proposed massive reductions to state spending, including cuts to schools, healthcare, public safety. He even plans to close state parks to save money. Cities and counties, also reeling from lost revenue, also will have to make unpopular decisions about parks and recreation, library hours, police patrols and reductions of a whole range of services.


“The money from this oil tax won’t solve all our problems,” said Berg. “But it’s a good start. Not only does this get us past all that no-tax rhetoric, it puts these petro-dollars to work, educating a generation of children who will be called upon to build a cleaner, brighter and better future.”


Nationwide, 21 other states impose a similar tax – including Texas, Ohio, Colorado, Tennessee, West Virginia – virtually all of which enjoy lower gas prices than California


“Tell the governor and the Republicans we want schools and healthcare,” said Berg. “Tell them we don’t need right-wing doubletalk about strangling government. We need to work together. The old partisan gridlock, business-as-usual approach won’t cut it this year.”


Assembly Bill 9xxx was heard on the Assembly floor, but failed due to Republicans not supporting the measure.


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