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Santa Barbara County Supervisors Vote to Put Oil Production Tax on 2012 Ballot

Carbajal, Farr and Wolf back severance tax measure; county officials say it would bring in as much as $3.3 million in annual revenue

Despite an outcry from energy industry advocates, the Santa Barbara County Board of Supervisors voted Tuesday to move ahead with a ballot measure asking voters to support a tax on oil production in the county.

Support for the tax proposal, which would be added to the November 2012 ballot, came from the three South Coast supervisors: Salud Carbajal, Doreen Farr and Janet Wolf. North County Supervisors Joni Gray and Steve Lavagnino voted against it.

The county government is exploring strategies to increase revenue as officials have attempted to cut costs, said Dennis Bozanich, assistant to County Executive Officer Chandra Wallar.

Bozanich said a tax could mean $1.8 million to $3.3 million in additional revenue for the county annually. The county could tax the oil per barrel, look at the value of the oil, or do a per well charge or some hybrid of those three options, he said.

Oil production itself is not currently taxed in Santa Barbara County, but it is accounted for in property tax assessments. Countywide, all properties amount to $662 million in assessed value, with $12 million of that figure from properties associated with oil production and processing.

Energy producers in California currently do not pay a severance tax on extracted oil, but a statewide ballot measure is in the works to impose one. Money collected from the tax would go toward K-12 education in the state, said Bozanich, who added that tax proponents are still in the process of gathering signatures.

A crowded 2012 ballot is increasingly likely as school districts and other special districts and municipalities consider whether to include additional taxes and bond measures to deal with their own budget woes next year.

Santa Barbara County considered a similar severance tax in 2008, but abandoned the idea because Measure A was on the same ballot. County staff maintains that any local tax would not have any effect on the price that consumers pay at the gas pumps because those prices are set regionally and globally. The cities of Beverly Hills, Long Beach and Signal Hill have their own taxes, and many states impose an oil severance tax.

Eight speakers were on hand Tuesday, and all of them opposed the tax.

Blair Knox, public affairs director of the California Independent Petroleum Association, reminded the supervisors that the trade group has a perfect record of opposing every attempt at implementing a severance tax over the last 10 years.

“The voters have said time and again that they oppose a severance tax,” he said.

The Santa Barbara County Taxpayers Association conducted a survey to “take the temperature of residents,” said executive director Joe Armendariz, who added that the group hired a research firm to survey 500 people, and only 45 percent of those surveyed said they would support the ballot measure.

“That number needs to be at about 60 percent to have a positive outcome,” he said.

The survey went further and asked if respondents would support the measure if the tax money went to support firefighters, a new jail or public schools. Only schools showed enough support to approach the two-thirds majority required for approval.

More than 70 percent of voters were adamantly opposed to using taxpayer monies on a survey, Armendariz said.

“This proposal is a loser,” he said. “There will be substantial, significant opposition to this measure.”

Even an environmental advocate who spoke Tuesday expressed concern about a ballot measure. Linda Krop, staff attorney for the Environmental Defense Center, said that raising revenue from the oil industry could incentivize increased production.

“We have no problems with the county discussing this issue,” she said, but added that the county should explore other options.

But the opinion of South County elected officials on the dais was different.

“This is an item I believe our county is ready to look at seriously,” Wolf said. “It’s a no-brainer.”

Carbajal said he couldn’t support spending any money to survey residents in a county poll, but commended the Taxpayers Association for funding its own study. Beach parking fees are on the horizon and currently being studied by staff, and other taxes aren’t off the table.

“We would be irresponsible to not consider bringing all of these items before this board,” Carbajal said.

Lavagnino said the Taxpayers Associations’ polling raised questions about the viability of a ballot measure.

“On an initiative ballot you cannot start with a 45 percent support,” he said. “It just doesn’t work that way.”

Krop’s caution also raised red flags for Lavagnino, as well as the opposition from oil producers.

“Industry has the resources to go out and battle this,” he said.

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

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