HAYWARD | Sept. 15, 2011 | State Treasurer Bill Lockyer voiced support Thursday for taxing oil companies drilling in California--the only state in the union that does not excise a severance tax on oil production.
Speaking to students at Chabot College, Lockyer responded to a query from an audience member who asked if he supported a severance tax on drilling in the state. "Oil companies?" said Lockyer. "Yes."
The issue of how to reap up to $3 billion in new revenue from oil drilling in a time of falling tax receipts is likely to gather steam over the next year. Supporters of the tax are currently gathering signatures for a voter-backed referendum next June surely to attract vehement opposition from Big Oil interests.
Lockyer called the tax "efficient" and calculable without much argument. "Severance taxes are a really easy tax to levy," he said, "because every barrel produced clicks the meter and you're not fighting and arguing over what's down under the ground."
As the state's top banker, Lockyer has gained praised for guiding the treasury through difficult times while maintaining his reputation for veering from his party's talking points. Lockyer, though, also cautioned against ruffling the state's existing tax base.
"One of the things we always worry with tax policy is it could overburden an industry, a business or person," he said. "One of the interesting things about the oil industry is they can't move--the oil's here.
Lockyer, who also resides in Hayward, was speaking at the community college as part of its year-long 50th anniversary celebration. His comments on securing new streams of tax revenue jibbed easily with repeated calls for the state to refocus its attention on funding higher education.
The state's budget is essentially made up of funding for prisons, health care and school, Lockyer said, with little wiggle room for lawmakers to maneuver. However, he urged cuts to health care as a way to address the inequities in funding education. "If we continue to hollow out education, we won't be up to the task," he said of the future generations competition in the global marketplace.
A proposed referendum would excise 15 percent on any barrel of oil extracted on-shore or off-shore and produce an estimated $3 billion in revenue for all levels of education in the state. According to the proposed referendum, community colleges like Chabot might reap just over $1 billion from the new funding stream.