The University of California and other public education systems could receive boosts in state funding through two proposals to tax California oil extraction – one that is currently circulating among California residents and another in the state Senate.
The California Modernization and Economic Development Act would enact an oil severance tax on crude oil extraction in California. The ballot proposal needs to gather 505,000 signatures in the next five months to qualify for the 2014 ballot.
The act would place a 9.5 percent tax on oil and gas extracted in the state, said Jack Tibbetts, a third-year political science student at UC Berkeley and the author of the act. The roughly $2 billion generated annually from the tax would then be divided between public K-12 and public higher education institutions.
Tibbetts authored the proposal in late 2012 and reviewed it with different professors and groups. He then submitted it to the attorney general’s office, which cleared the proposal for circulation, Tibbetts said.
Tibbetts said the proposal has earned endorsements and recognition from some significant public figures, including former U.S. Secretary of Labor Robert Reich.
“Using a tax on oil extracted from under California to help finance the education of Californians should be a no-brainer,” Reich said in a statement supporting the California Modernization and Economic Development Act. “It won’t affect fuel prices. It will only improve our schools.”
The oil tax proposal generated statewide attention when they held a rally last week to advocate for the act. UCLA students have since become involved with the movement to tax oil to raise money for education.
Many smaller environmentalist interest groups also support the effort, said Tibbetts, who is also the campaign manager for Californians for Responsible Economic Development, a group which is campaigning in support of the act.
Some of the groups that have endorsed the proposed act are the University of California Student Association, the Student Senate for California Community Colleges and Associated Students UC, the student government at UC Berkeley.
Dianne Klein, a UC spokeswoman, said the University did not have enough information to comment on the UC’s stance on the tax at this time.
A separate proposal to tax oil production is currently circulating in the state Legislature.
In February, state Sen. Noreen Evans proposed Senate Bill 241, which will provide $2 billion for public education and parks through an oil severance tax, according to Evans’ website.
California is the fourth-largest oil-producing state in the nation, and the only one of the top ten oil-producing states that does not already impose a significant oil severance tax, according to a press release from Evans’ office.
Similar to the California Modernization and Economic Development Act, SB 241 would enact a 9.5 percent tax on large oil companies for extracting oil in areas with California jurisdiction. SB 241 would use 93 percent of tax revenues to fund public education and 7 percent to fund state parks, according to a press release from Evans’ office.
The bill passed through the Senate Governance and Finance Committee on Wednesday.
Evans’ office has been working closely with supporters of The California Modernization and Economic Development Act because they have very similar goals in mind, Tibbetts said.
Members of the external vice president’s office of the Undergraduate Students Association Council at UCLA, with members of the UC Student Association, took a delegation of about 60 UCLA students to Sacramento in March to lobby for SB 241, said Hinnaneh Qazi, a fourth-year political science student and state affairs director in the undergraduate student government’s external vice president’s office.
Opponents of both Senate Bill 241 and the California Modernization and Economic Development Act – like the Western States Petroleum Association – have argued that the proposed severance taxes would hurt consumers and oil companies alike.
“It’s unfortunate that people who should know better continue to hold out this faulty promise to California students and educators, that there’s a magic bullet that would solve these very serious and chronic state funding problems,” said Tupper Hall, a spokesman for the WSPA. “It is simply not true nor productive to think that a tax on oil is an easy answer.”
With a Democratic supermajority in the state Legislature, Evans’ office is optimistic that SB 241 will pass, said Teala Schaff, communications director in Evans’ office.
The bill will go to another committee in the Senate before it can be voted on by the chamber.
In the meantime, Tibbetts said supporters of the California Modernization and Economic Development Act will continue their efforts to get enough signatures to add the proposal to the 2014 ballot.