[courtesy of California Progress Report]

How tax justice in California could erase deficit with $20 billion in new revenues

By Lenny Goldberg
Executive Director
California Tax Reform Association

Despite a huge budget deficit, California’s tax system leaves out opportunities to increase revenue through the closing of loopholes, exclusions, and the implementation of progressive taxation alternatives. When Gov. Arnold Schwarzenegger cut billions in revenues and borrowed to cover the previous deficit, the burden of cuts was shifted to the state’s vital services, including education, health care, public safety and programs for the poor.

Though the state always faces deficit problems during an economic recession, the vast scope of this year’s $17.2 billion deficit stems directly from the governor’s cuts in revenue and the resulting costs of borrowing. So, where are the revenue sources to make up the difference?

Taxing oil shot down once

California is the only state in the country without a production tax on oil, and taxes oil far, far lower than any state — less than any place in the world our research shows. Two months ago, Assembly Democrats tried to do just this, but were shot down by Republican legislators.

[courtesy of California Progress Report]

By Robert Cruickshank

Here in the dog days of April, as the state awaits the governor's May Revise, frustration seems to be setting in over the budget. The real political battles will begin in earnest after the May Revise, but the jockeying for position has been going on for some time, including in the state's media. Unsurprisingly, the media wants to spin the budget crisis as a failure of all Sacramento politicians, when in fact the current impasse is the responsibility of one group alone: the Republicans.

As an article in yesterday's Sac Bee would have us believe, there is "scant support for budget changes." But a deeper look shows that while Democrats have already proposed budget fixes, such as closing the yacht loophole and creating an oil severance tax (as exists in nearly every other state), it is the Republicans alone that have blocked meaningful budget action.

And why have they done so? Republicans want us to believe that any revenue solution is economically damaging. From the Bee:

“However, Sen. Dave Cogdill of Modesto, the GOP's incoming leader, said the state should not take away credits at a time when the economy is struggling.

by Robert in Monterey [courtesy of Calitics - Front Page]

[courtesy of The California Majority Report]

The Assembly Republican Caucus yesterday voted against legislation to close tax loopholes on big oil companies and dedicate $1.2 billion to preventing the layoffs of teachers throughout California.<> <>The legislation, AB 9XXX, called for California to join every other oil-producing state by placing a severance tax on oil produced in California. Some 21 other states, including Texas have the tax. Under the bill, oil companies would be prohibited from passing along the tax to consumers at the pump. The Board of Equalization would be given the authority to monitor and investigate instances where producers or purchasers of oil have attempted to gouge customers.<> <>"Last week, Assembly Republicans sided with yacht owners and this week they’re siding with Big Oil," said Senator Art Torres (Ret.), Chairman of the California Democratic Party. "Clearly, the Assembly Republicans’ values are out of sync with their constituents, particularly when thousands of teachers across the state are receiving pink slips."<> <>The bill also would impose a windfall profits tax on Big Oil companies. The revenue derived from the tax would be used to mitigate teacher layoffs what would result from the Governor's cuts to K-14 education.

[courtesy of California Progress Report]

By Frank D. Russo

As someone who grew up in San Diego and in my tender years as a youth in the 60’s had to endure news stories that would have led one to believe Barry Goldwater was winning presidential election of 1964, I am used to a lot of baloney from what in those days were two incredibly right wing papers—The San Diego Union (the morning paper) and the San Diego Evening Tribune (published in the afternoon). But today’s vitriolic editorial Populist ploy: Oil tax hike amounts to Nunez payoff to CTA against a proposed oil severance tax being voted on today in the California Assembly takes the cake.