Tuesday, May 22 , 2018, 3:35 am | Mostly Cloudy 51º


Gray, Armendariz Speak Out Against Oil-Tax Legislation

They say AB 1604, proposed by Pedro Nava, would threaten jobs on the Central and South coasts

Local leaders warned Thursday that residents on the Central and South coasts whose livelihoods depend on oil production are among the nearly 10,000 Californians whose jobs Assembly Bill 1604 by Assemblyman Pedro Nava would kill.

Santa Barbara County Supervisor Joni Gray joined Joe Armendariz, president of the Santa Barbara County Taxpayers Association, at a news conference for the Save Our Jobs Coalition at the Betteravia Government Center in Santa Maria.

“AB 1604 would place a new 10 percent tax on oil production in California,” Gray said. “Because much of the state’s oil comes from the Central and South Coast areas, AB 1604 would hit us particularly hard. This oil severance tax would make California oil production more expensive, giving oil producers a real incentive to cut their operations here and import oil from outside California. That means they wouldn’t need as many employees here. An economic study of a similar severance tax measure found that almost 10,000 California jobs would be lost as a result.”

Gray added that AB 1604 also would reduce local revenues for schools and county programs.

“Assemblyman Nava and his supporters like to say that California is the only oil-producing state without a severance tax,” Armendariz said. “This is true on its face, but is misleading. California taxes oil producers in ways other states do not. For example, we have the highest corporate income tax in the country. Texas, Nevada and others have none. California charges a sales tax on the purchase of the expensive manufacturing equipment used in oil production. Most states do not.

“California is already taxing oil producers at a high rate. The addition of the AB 1604 severance tax would give California yet another area where it has the highest taxes of all.”

AB 1604 will be heard by the Senate Revenue and Taxation Committee in Sacramento on Monday.

— Scott Macdonald represents the Save Our Jobs Coalition.


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