BAKERSFIELD,CA- County supervisor David Couch plans to be in Sacramento this week to speak out against a proposed tax on oil production. Senate Bill 1017 would introduce an oil severance tax that supporters say would pump money back into higher education and other California agencies.
Critics say a proposed oil severance tax would put extraordinary pressure on an industry that provides thousands of local jobs and pumps money back into our local economy.
"I think it will have a devastating impact on our local economy. Raise oil prices. I noticed we are upward of $4 a gallon already,"said Couch.
Local companies pay corporation, sales and property taxes and they pay fees to fund regulation.
But we're the only major oil-producing state not to tax oil. SB 1017 would impose a 9.5 percent oil severance tax, and a 3.5 percent tax on natural gas production.
"In a lot of those operations, a 9.5% is about the profit. So people are not going to produce something that they are not going to make a profit at. And if you literally take that supply off the market, that would drive up prices even further. Obviously, if they aren't producing, you're going to lose jobs," said Couch.
Couch says statewide, the oil industry generates more than 300,000 direct and indirect jobs.
Sen. Noreen Evans of Santa Rosa introduced the bill. She was on spring recess when we called but in February had this to say:
"It's the right thing to do. We've just come through a terrible recession there are a lot of people who are unemployed we have students who cannot finish their degrees and its time for California to make this reinvestment," said Evans.
California colleges and universities would split 90 percent of the oil severance revenue. The other 10 percent would go to parks and a disaster fund.
Some California student groups support the bill but the Western States Petroleum Association and the California Chamber of Commerce say the bill would put jobs in jeopardy.
Critics say a proposed oil severance tax would put extraordinary pressure on an industry that provides thousands of local jobs and pumps money back into our local economy.
"I think it will have a devastating impact on our local economy. Raise oil prices. I noticed we are upward of $4 a gallon already,"said Couch.
Local companies pay corporation, sales and property taxes and they pay fees to fund regulation.
But we're the only major oil-producing state not to tax oil. SB 1017 would impose a 9.5 percent oil severance tax, and a 3.5 percent tax on natural gas production.
"In a lot of those operations, a 9.5% is about the profit. So people are not going to produce something that they are not going to make a profit at. And if you literally take that supply off the market, that would drive up prices even further. Obviously, if they aren't producing, you're going to lose jobs," said Couch.
Couch says statewide, the oil industry generates more than 300,000 direct and indirect jobs.
Sen. Noreen Evans of Santa Rosa introduced the bill. She was on spring recess when we called but in February had this to say:
"It's the right thing to do. We've just come through a terrible recession there are a lot of people who are unemployed we have students who cannot finish their degrees and its time for California to make this reinvestment," said Evans.
California colleges and universities would split 90 percent of the oil severance revenue. The other 10 percent would go to parks and a disaster fund.
Some California student groups support the bill but the Western States Petroleum Association and the California Chamber of Commerce say the bill would put jobs in jeopardy.