Democrats hope to use anger over BP disaster to pass tax on oil production
Budget plans in the Legislature contain a levy on petroleum pumped in the state. Democrats hope the governor supports such a proposal as oil firms seek to dismantle his environmental achievements.
Shane Goldmacher
Los Angeles Times
06/27/2010
Reporting from Sacramento — — As crude oil continues to gush into the Gulf of Mexico, many California Democrats are hoping to seize on the public mood created by the crisis to push through a new tax on oil production to help balance the state's beleaguered budget.
A proposed levy on oil production is at the core of both Democratic budget plans circulating in Sacramento, and thus will be on the table in upcoming budget talks with Gov. Arnold Schwarzenegger. And though the Republican governor has emphatically said he is opposed to new taxes this year, he has supported the oil tax in the past. Perhaps more importantly, his relations with the oil companies — some of which are trying to dismantle his signature environmental achievement — are at an all-time low.
Democrats are confident they have finally hit upon a source of new revenue that voters won't loathe to help patch the budget shortfall.
"It is the perfect time in every possible way," said Rick Jacobs, chairman of the Courage Campaign, a 700,000-strong liberal online group that has pushed for an oil tax.
California is the only major oil-producing state not to charge companies for pumping it out of the ground, Democrats are quick to note, though the state taxes the resource in other ways. Schwarzenegger himself endorsed an oil extraction tax in 2008, but he has opposed any new taxes since May 2009. That is when voters, by a nearly 2-1 margin, rejected extending several hikes that lawmakers and Schwarzenegger had approved months earlier to shrink the deficit.
"We've done that," Schwarzenegger has said of taxes.
The oil tax alone would hardly bridge California's $19.1-billion budget shortfall, which represents roughly a fifth of state spending. But an extra $1.2 billion per year would be enough to stop, for instance, Schwarzenegger's proposal to eliminate day care for 142,000 low-income children.
Republican lawmakers, however, remain adamantly opposed.
