Pumping for Funds

A bill is making its way through the California State Assembly that may allocate a new source of funding for public higher education in this state. Proposed by Majority Leader Alberto Torrico, AB 656 would institute a 9.9-percent severance tax on oil and natural gas extracted from California starting in January 2010.

Though AB 656 would not solve UC funding problems, we support the bill because of the additional support it could provide to public universities at a time when they are facing massive cuts. With a set source of funding, higher education may no longer be such a low priority in state budgeting.

The bill is predicted to produce $900 million for the UC, CSU and community college systems on an annual basis. The university would receive roughly $270 million per year. Clearly, that is not a sufficient amount to provide for the university's operating costs and other necessary funding requirements. But that allocation would be a sure amount from year to year, unaffected by the political currents or the state of the general fund.

While Californians already face high taxes, the oil industry is still profitable and would likely not be dissuaded from drilling in California based on an added tax. The potential loss of jobs and higher gas prices is a concern, which could hopefully be rectified through added provisions.

An additional concern is whether the state might use this added allocation as a reason to cut the general fund money the universities would otherwise receive. In anticipation of this possibility, we urge the Legislature to include provisions in the bill that would prevent the state from cutting more higher education funding.