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Speaker proposes oil taxes for teachers
By Judy Lin - jlin@sacbee.com
Published 1:50 pm PDT Tuesday, March 11, 2008
Assembly Speaker Fabian Núñez is proposing levying a 6 percent tax on all oil produced within the state and imposing a 2 percent tax on windfall oil profits to protect teachers from layoffs. Brian Baer / Sacramento Bee file photo, 2008
Assembly Speaker Fabian Núñez has introduced a bill to divert some of the oil industry's profits to protect teachers from layoffs.
Núñez, a Los Angeles Democrat with close ties to education unions, is proposing a two-pronged approach by levying a 6 percent tax on all oil produced within the state, and imposing a 2 percent tax on windfall oil profits.
Together, the taxes would generate an estimated $1.2 billion a year for a cash-strapped state that still faces an $8 billion deficit for the fiscal year starting in July. Under the speaker's bill, ABX 9, oil tax revenues would be dedicated for schoolteachers, who are facing potential layoffs under Gov. Arnold Schwarzenegger's across-the-board budget cuts.
In an opinion piece set to run in Wednesday's Bee, Núñez says his proposal won't resolve the budget gap, but it will make "a big difference where it matters - our children's future."
The bill, which requires a two-thirds vote, is expected to taken up by the Democratic-controlled Assembly this week, but was expected to fail. Assembly Republicans, who killed a governor-led effort to close a tax break for purchasers of yachts, recreational vehicles and planes, have vowed to oppose new taxes.
Since declaring his opposition to taxes in January, Gov. Arnold Schwarzenegger's rhetoric has shifted, saying repeatedly that he is open to discussing new revenues by eliminating or modifying some income tax breaks.
Last week, he took a step further and mentioned sales tax "ought to be on the table."
Under Núñez's proposal, the state would impose a 6 percent tax on all oil extracted from its land to generate an estimated $970 million in the next fiscal year. It would apply a 2 percent surcharge tax on oil companies that earn more than $10 million.
The speaker argues California, which generates roughly 190 million barrels of oil a year, is the last to impose an oil tax. Other states charge between 2 and 15 percent
The idea isn't new. Voters in 2006 rejected Proposition 87, which would have imposed a per-barrel tax of up to 6 percent of the value of oil produced in the state.
For a complete story, see Wednesday's Bee.
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