On Oil Deal Dems Go for Blood


Many Californians don't know the history, but California was once a big oil state -- producing as much as a quarter of the world's supply in the early 20th century.

The oil industry was so crucial to the early growth of California that this remains the only oil-producing state without a severance tax--a tax on pulling oil out of the ground.

Yes, that's right -- supposedly high-tax Caiifornia refuses to tax what supposed tax-phobic Texas and Alaska tax.

Democrats have long wanted to change that.

The latest attempt comes from the state Democratic party chairman, John Burton, who recently filed an initiative for just such a tax. (Burton explained why to KQED's John Myers here).

The policy arguments for such a move are strong.

Oil in the ground is a public resource, and the public should share in the profits from selling it. Since other states have the tax, California would not be at a competitive disdvantage by establishing such a tax. And state programs -- particularly the state university systems -- could use the money.

But such proposals have died -- in the face of a state governing system that makes raising taxes hard and an oil industry that opposes such changes.

It seems likely that this proposal may die again, in part because of its timing. Burton filed a tax-raising initiative at a time when there are more than a half-dozen tax-hike initiatives are in various stages of the qualification process.

Those initiatives could bleed money and political support from an oil tax. Worry is widespread that if multiple tax measures qualify for the ballot, they could all go down, as voters recoil from being asked to raise taxes multiple times.

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