Senator proposes oil severance tax to fund higher education

SB241.COURTESY
Noreen Evans/Courtesy

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A bill introduced by a California state senator early in February would impose oil taxes to fund public higher education.

Introduced by Sen. Noreen Evans, D-Santa Rosa, SB 241 would allow the state Department of Conservation to administer a 9.9 percent oil severance tax on companies extracting oil in California. According to Senator Evans’ communications director Teala Schaff, 93 percent of the tax revenues would be allocated to public higher education while 7 percent would go toward renovating state parks.

“California doesn’t tax on oil, so it is a fairness issue because other states have oil taxes, and if people take something from the state through oil, this is a way for us to give something back to the state,” Shaff said.

Shawn Lewis, executive director of the Berkeley College Republicans, said that it is counterintuitive to make higher education dependent on the oil industry when general oil consumption in California is decreasing.

“If this oil severance tax becomes law, oil production in California would be the most costly in the nation,” Lewis said.  “It is no secret that these increased costs would be passed on to consumers, and low income families would be especially hurt by any further increases to the cost of gasoline.”

Despite a fear that oil taxes would have an effect on consumers and increase the price of oil, Shaff said that the bill would not have such a large impact on global oil prices.

A group of UC Berkeley students pushed for a similar bill — the California Modernization and Economic Development Act, which is another oil severance tax that would raise a projected $2 billion for higher education, infrastructure and county governments. Sofie Karasek, a UC Berkeley student and press secretary for CMED, said that a major concern with SB 241 is that it does not provide funds to municipal governments.

“While an oil severance tax must be implemented, it is important that the $2 billion raised is also invested in state infrastructure, green technology and vocational training, as CMED does,” Karasek said.

Evans’ bill gained wide support among student protesters during the rally at the capitol on Monday. Supporters viewed the severance tax as a possible long-term solution to the problem of decreasing state funding of public universities.

“It was really encouraging to see so many students in support of the oil severance tax,” said Karasek via email. “It signifies that young people recognize the importance of investing in our future, and passing an oil severance tax is a great way to start.”

The bill is currently being discussed in the Committee on Senate Governance and Finance and, if made into law, will take effect in January 2014.

Contact Seif Abdelghaffar at [email protected].

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  • abernahi

    What happen to this? Did the oil lobby kill it, paying off our representatives?

  • abernahi

    property tax is imposed by the county. This tax would be levied by the state on oil extraction. Note that every other state in the US has such a state. Also note the quality of education in the state of California is on par with Mississippi, down around 49th. Also note that illegals pay taxes. Also note that 99.9% of students are legal anyway.