Oil Severance Tax -- A bad idea for California

By CMTA Staff

Capitol Update, Feb. 21, 2014 Share this on FacebookTweet thisEmail this to a friend

Senator Noreen Evans (D-Santa Rosa) introduced SB 1017 to impose a 9.5 percent severance tax on oil and natural gas production in California. Similar attempts have failed in the past and it could fail again this year – Governor Brown has stated that “this is not the year for new taxes.” His support for Proposition 30 in 2012 was crucial to its passage, imposing temporary higher income taxes on some taxpayers and a higher sales tax on everyone. The state has been enjoying budget surpluses as a result of Prop 30, high capital gains receipts and a gradually improving economy.

The bill is supported by Tom Steyer, a wealthy activist for environmental causes who led the successful ballot campaign in 2012, Proposition 39, to impose a single-sales factor calculation methodology for corporate income tax in California. If SB 1017 fails – it requires a 2/3 vote of both houses and signature by the Governor – Steyer may pursue an initiative measure for the 2016 ballot.

CMTA released the following statement in opposition to the bill: “California should be taking steps to grow jobs and increase manufacturing and other business investments in the state. Sen. Evans' new tax on California oil moves us in the wrong direction, increasing costs for consumers and employers, hurting jobs and making us more dependent on foreign oil. Stopping this new tax would send a message that California is serious about attracting jobs and investment in the state.“

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