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Noreen Evans calls for tax on oil for education, parks

Published: Tuesday, February 12, 2013 at 12:32 p.m.
Last Modified: Tuesday, February 12, 2013 at 12:32 p.m.

In a replay of earlier battles, state Sen. Noreen Evans is going after Big Oil in California in an attempt to raise money for higher education and state parks.

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Noreen Evans

PD FILE, 2013

The Santa Rosa Democrat on Tuesday introduced legislation seeking a tax on oil extraction in California.

Evans said the tax would raise an estimated $2 billion annually, 93 percent of which she proposes to steer toward public colleges and universities and the rest to help shore up the state's beleaguered parks system.

"It's just common sense," Evans said Tuesday.

Evans failed in 2009 to get similar legislation passed. California voters also turned down Proposition 87 in 2006 that would have taxed oil extraction -- called a severance tax -- mainly for the purposes of funding alternative energy.

Evans said her chances are better with SB 241, known as The California Education and Resources Reinvestment Act, because Democrats now have a two-thirds majority in the Legislature and because the money would be devoted to education and parks, two causes the state's residents care passionately about.

"I'm not saying it's going to be easy, but it's the right thing to do," she said.

An oil industry representative, however, predicted that the effort would fail again.

"Once people come to understand the implications of increasing taxes on energy production, they do seem to reach the conclusion that it's bad policy for the state of California," said Tupper Hull, spokesman for the Western States Petroleum Association.

California, which Hull said produces 550,000 barrels of oil a day, is the only oil-producing state in the nation that does not levy a severance tax on the enterprise.

Evans said the 9.9 percent severance tax she wants the oil industry to pay is about in the middle of what other oil-producing states impose.

The revenues would help fund California's three higher education systems and the Department of Parks and Recreation.

Evans announced the bill on the same day she attended a Capitol hearing on fracking, the controversial process of creating fractures in underground rocks and rock formations to extract oil or gas.

She said based on estimates of how much oil could be produced in California using the method, a severance tax could generate as much as $10 billion annually.

"If we don't create an oil-extraction tax right now, that means California doesn't capture all that revenue," she said.

Hull said California's oil industry pays about $6 billion annually in property, corporate and other taxes related to production and distribution. The figure is based on 2009 data, which Hull said is the most recent available.

Hull said adding a tax would reduce oil production, cost jobs and create "upward pressure" on oil and gas prices.

Other experts say such a tax would not lead to higher energy costs for Californians, primarily because the price of oil is set in the world market.

Evans' effort to funnel more taxpayer money to the state Department of Parks and Recreation is notable given her vocal criticism of the agency, which was engulfed in scandal last year after it was discovered that officials were sitting on a hidden surplus of $54 million at a time when 70 parks statewide were threatened with closure.

Evans on Tuesday said the public can have confidence that money raised through an oil tax would be spent as intended by state parks because the agency has new administrators who are subject to stricter legislative oversight.

"I think the department is seeing much more public scrutiny, as well as internal discipline," she said.

Roy Stearns, a spokesman for state parks, said the agency welcomes "innovative approaches" aimed at achieving "a sustainable funding source."

You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.

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