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State Sen. Noreen Evans faces uphill battle on oil tax

It has been killed repeatedly in the state Legislature or at the ballot box, but the backers of an oil severance tax hope 2014 is the year to get it done.

History is not on their side.

A succession of Assembly speakers, lawmakers, environmentalists, tax activists, even students, have unsuccessfully sought a statewide tax on California oil as it comes out of the ground. California, fourth in the nation in oil production, is the only one of 10 oil-producing states that does not have such a tax, although it collects other levies, fees and royalties. Support has come almost entirely from Democrats.

The latest attempt by Sen. Noreen Evans, D-Santa Rosa, would establish a 9.5 percent severance tax on oil and natural gas and raise perhaps $2 billion annually, with half the money going to public universities, community colleges and the other half divided equally between parks and social services. Her bill, AB 1017, needs a two-thirds vote in the Legislature and the governor’s signature to become law.

But the obstacles are daunting.

“I don’t think this is the year for new taxes,” Gov. Jerry Brown, up for re-election this year, said on Jan. 9 in unveiling the state budget. “When I went up and down the state campaigning for Proposition 30 (a hike in sales and income taxes), I said it was temporary and it’s going to be temporary.”

During his earlier stint as governor, Brown and others favored an oil severance tax to raise money for bus and rail projects, but voters in 1980 rejected it handily as Proposition 11. Twelve years later, voters turned down Proposition 167, which would have imposed a 3 percent oil severance tax, among other levies.

Another effort in 2006, Proposition 87, was rejected by voters following one of the costliest campaigns in the state’s history, in which both sides spent a total of more than $154 million, with about $94 million from the petroleum industry and its allies and $60 million from the proponents. The latter included Hollywood producer Steve Bing, who spent nearly $50 million of his own money in the fruitless effort.

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