Thursday, July 19 , 2018, 7:02 pm | Fair 73º


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Proposed Oil Production Tax Fails to Garner Enough Support from Santa Barbara County Supervisors

A plan designed to bring in more revenue sparks heated debate between North and South County board members

The political divide between North and South County proved too great for the Board of Supervisors to bridge Tuesday. In the end, a proposed oil production tax couldn’t garner the support it needed and will not go before voters this year.

Last November, the county CEO’s Office proposed the production tax in an effort to explore new revenues to boost the county’s struggling bottom line.

Earlier in Tuesday’s meeting, the County Fire Department was reviewed by an outside consultant, who said the department would need $4 million more a year to maintain current service levels. Oil production taxes won’t be a way to garner that money, however — at least for the near term.

Oil production itself is not currently taxed in the county, but producers must pay property taxes. As of Tuesday, oil prices neared $101 a barrel, and oil producers in Santa Barbara pay $2.44 a barrel in county fees and taxes.

Dennis Bozanich, assistant to County Executive Officer Chandra Wallar, proposed several plans to supervisors, one of which would tax oil per barrel. He said producers could pay 60 cents per barrel, totaling more than $2 million in revenue for the county.

That amount is what the City of Signal Hill charges. It is one of several cities that impose their own production taxes. A set amount could also be charged per well.

In order for the vote to go forward in Santa Barbara County as a general tax, the hurdles proved to be too high. A fourth-fifths vote of the Board of Supervisors would be required to get the item on the ballot at all. On top of that, the item could be placed only on a ballot that also included supervisorial candidates. Three of the board members are up for election this year, but there’s no way to know whether they’ll be elected on the June ballot or have a run-off election in November.

A majority approval from voters would be required on the oil tax item after that.

A crowded 2012 ballot is increasingly likely as school districts, the city and state ask voters for additional funds to deal with their own budget woes.

Tuesday’s split initially came from South County Supervisors Janet Wolf, Doreen Farr and Salud Carbajal, who argued that voters should be allowed to decide on the measure.  A vote was taken with those three supervisors voting in favor of a general tax.

“I feel that when we go out to our constituents and they understand, they’ll understand this is a realistic source of revenue and they’ll support us,” Wolf said.

But North County Supervisors Steve Lavagnino and Joni Gray argued that a tax would kill job growth in their region, and one of their votes was needed to go forward.

Lavagnino noted that oil companies make up three of the top 10 property taxpayers in the county.

“It’s not that they’re not paying; it’s that we’re going to the well again,” he said, adding that agriculture and petroleum industries are still hiring. “I don’t think people are going to be able to stomach this in the long run.”

The tone turned personal when Lavagnino spoke, saying that North County districts would be disproportionately affected by the taxes.

“I see why you would say, ‘Why don’t we tax them?’” he said to South County supervisors.

“We’re trying to look to the general good of the county,” Wolf responded. “The impact will be very negligible.”

Gray recalled when oil companies left Santa Maria en masse in decades previous because it became too expensive to operate.

“You live in a city that doesn’t like oil,” she told Wolf. “I do not want to see those jobs go away.”

Wolf said the board respected all of the views represented.

“I wanted to let you know that,” she told Gray. “We sometimes have different worldviews.”

When Wolf suggested a $35,000 poll to test voter reception to the tax, formerly sympathetic Farr pulled her vote and said she was uncomfortable going forward. 

After Carbajal withdrew his vote, the motion failed for lack of a second.

Noozhawk staff writer Lara Cooper can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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