Calif. AG candidate calls for oil producers tax

By Chris Rizo | Aug 7, 2009

Pedro Nava (D)

SACRAMENTO, Calif. (Legal Newsline)-A Democratic candidate for California attorney general said Thursday he plans to propose an oil tax aimed at bankrolling state programs cut because of a catastrophic fall in state revenues.

State Assemblyman Pedro Nava of Santa Barbara said he believes that the oil industry ought to pay Californians nearly 10 percent of the gross value of the oil they take from the Golden State's lands and sea beds.

"This budget crisis has hit California very hard. It appalls me that Wall Street has been viewing the crisis as a boon for oil companies," Nava said in a statement. "With high unemployment, a stagnant housing industry, and reduced consumer spending, California families are feeling a bruising economic pinch and paying a heavy toll. I want to make sure that the oil industry pays their fair share as well."

The proposed tax would result in approximately $1.5 billion in increased General Fund revenues annually, Nava said, adding that the money would be available for all General Fund expenditures.

Of the top ten oil-producing states, California is the only one that does not charge producers a severance tax.

"The mineral resources of this state belong to all Californians," Nava said. "The state government has an obligation to the people to make sure that Californians are benefiting from the use of these resources by the oil industry."

Since California only produces less than 0.7 percent of the world's oil, the proposed severance tax would not affect gasoline prices at the pump, he added.

The legislation, as proposed, would prevent oil companies from passing on this fee to motorists. To pass, the bill requires a two-thirds vote in both houses, meaning that some Republican support would be needed in the Democratic-led Assembly and state Senate.

From Legal Newsline: Reach staff reporter Chris Rizo at

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