Update November 8, 2006
Proposition 87 was rejected by 54.8% of voters.
Proposition 87 in Plain English
This proposition would tax oil production to bring in an estimated $4 billion that would then be directed toward alternative energy programs. California already receives about $14 million each year from oil production taxes.
Official Title and Summary
Alternative Energy. Research, Production, Incentives. Tax on California Oil Producers. Initiative Constitutional Amendment and Statute.
- Establishes $4 billion program with goal to reduce petroleum consumption by 25%, with research and production incentives for alternative energy, alternative energy vehicles, energy efficient technologies, and for education and training.
- Funded by tax of 1.5% to 6% (depending on oil price per barrel) on producers of oil extracted in California. Prohibits producers from passing tax to consumers.
- Program administered by new California Energy Alternatives Program Authority.
- Prohibits changing tax while indebtedness remains.
- Revenue excluded from appropriation limits and minimum education funding (Proposition 98) calculations.
Summary of Legislative Analyst’s Estimate of Net State and Local Government Fiscal Impact:
- New state revenues — depending on the interpretation of the measure — from about $225 million to $485 million annually from the imposition of a severance tax on oil production, to be used to fund $4 billion in new alternative energy programs over time.
- Potential reductions of state revenues from oil production on state lands of up to $15 million annually; reductions of state corporate taxes paid by oil producers of up to $10 million annually; local property tax reductions of a few million dollars annually; and potential reductions in fuel-related excise and sales taxes.
Analysis
- Official Legislative Analysis, California Legislative Analyst’s Office (PDF)
- In Depth Nonpartisan Analysis, League of Women Voters Ca.
Articles
- Proposition 87: Initiative would slap new tax on oil producers. San Francisco Chronicle
- Peter Schrag: Bad guys vs. ‘free’ goodies at the ballot box. Sacramento Bee
- Editorial: No on Proposition 87. A flawed vehicle dooms a good idea. Sacramento Bee
- Prop. 87: a pipedream. Prop. 87 promises that its huge new oil taxes won’t be passed along to consumers. Sure. Orange County Register
- Barrels of Money Fuel Oil Tax Fight. The battle over Prop. 87 pits a film producer against the industry. A spending record is likely. Los Angeles Times
October 24th, 2006 at 9:17 pm
The commercials on T.V. are misleading, you see more that are against then for, there must be a reason. More than likely the oil producers in the state would like to see us completely dependent on oil. If a person looks at the history of oil comsumption, the U.S. uses approximately 25% of the worlds supply in the world, and the Arabs don’t pay any tax to the U.S. and gets all kinds of economic aid from us. We should charge for all the help we provide and don’t get any credit for doing the right thing. We should realized after the first oil embargo that the Arabs were ready and willing to take aid and at the same time cause economic problems in other countries simply because they keep all the money to buy weapons, kill people, but don’t use the resourses for the good of their people. If this iniative can help change the balance of energy needed to sustain the way of life we are used to, then it’s time to get serious and start to make the right decisions and implement a new direction for energy needs before it’s too late.
November 9th, 2006 at 7:53 pm
The $0.51 per gal. corporate welfare to the oil refiners for adding 5.6% ethanol to California gas is about $500,000,000.00 per year.
The ethanol may add over $1.00 per gal. to the gas profit in California.
That may be about $100 billion in oil profit from California motorists.
The science is interesting but so is the money.
A $4 billion Prop. 87 oil tax may add $40 billion in oil profit.
Charlie Peters
(510) 537-1796
Clean Air Performance Professionals