California bill would tax oil companies, fund higher education

Jonathan Ayestas

California Senator Noreen Evans introduced the California Fair Resources and Reinvestment Act in February, with hopes it will give more money to universities in California.

The bill would impose a 9.5 percent extraction tax on oil companies that pull resources from the ground or water in California.

Sacramento State College Democratic President De’Anthony Jones said the bill aims to help public universities and restore the quality of education that was once present during the 1960s and 1970s.

“I can truly see this bill being a successor for more funding for the CSUs, UCs and community colleges, and really having a positive impact on making sure we can get more classes,” Jones said. “ This bil,l and what it aims to do, can really help our public university systems.”

The severance tax would generate approximately $2 billion a year. Half of the funds would be split between the CSU, UC and community colleges.

The Department of Parks and Health Human Services programs would divide the rest of the money.

Jones said the CSU system would receive a third of the $1 billion allocated for higher education, which is approximately approximately $333 million.

UC Berkeley student Jack Tibbet started the movement for the bill when he was prompted to take action after budget cuts last semester.

Proposition 30 is a temporary bill that funds education by taxing people of higher incomes, but will expire in 2015. The California Fair Resources and Reinvestment Act would try to extend the ideas behind the proposition.

Proposition 30 did not lower tuition, but froze it, which kept it from rising. Tibbet said 750,000 students from all California colleges dropped enrollment because they still could not afford tuition.

If passed, generated money would come as an endowment starting 2015, which a board of students and appointed individuals invest the money. A 5 percent interest would be accumulated at the end of the year.

Tibbet said $1 billion will go into a savings account the year it goes into effect, and $50 million would go into higher education at the end of the year. After 10 years, it will be more than $600 million in interest.

“When there’s another recession, it’s important the money is there to immediately provide relief to students and their families,” Tibbet said.

Tibbet said the bill would guarantee a reduction in tuition every year until Gov. Brown’s master plan, of having tuition rates where students pay little to nothing, is able to go into effect.

“Although this will start reducing tuition immediately, 100 years from now, we will be close to having universal education,” Tibbet said.

Teala Schaff, Evans’ secretary, said last year the bill was sent through the Appropriations Committee, but was never heard out.

Opposing oil companies like Chevron spent $14 million in lobbying against the bill last year.

“They have an enormous amount of wealth, and they’re not afraid to use it,” Schaff said.

Jones said California was the only oil producing state that did not have an oil severance tax, while other states like Alaska imposed a 35 percent severance tax.

Tibbet said there is profit in taxing oil companies because oil is not subject to a recession because people will keep driving, maintaining a demand for oil.

“A sales tax is a tax that affects every person in California.” Tibbet said. “An oil tax only affects the oil company.”

Schaff said the bill will address issues that have been neglected because of the recession.

“It would allow campuses to address different maintenance programs that have been stalled because of budget cuts in the last 5-7 years,” Schaff said. “That in turn would allow for new hiring to go on, and a lot of teaching positions to open up.”

Jones said the bill taxes oil companies and any statement about it imposing higher taxes on consumers if false.

“Taxpayers have paid their first share,” Schaff said. “Oil has not.”