Posted on 10/14/2006 1:42:35 PM PDT by calcowgirl
A $4 billion tax on oil companies would fund research into cleaner-burning fuels, reducing pollution and saving the lives of future California residents, supporters say.
But what will happen to prices at the gas pump?
That depends on whom you ask.
Proposition 87 aims to reduce petroleum consumption by 25 percent over a little more than one decade. If approved by voters in November, the tax would pay for incentives encouraging the production and purchase of vehicles that run on alternative energy.
Sixty percent of the state's air pollution woes can be blamed on moving vehicles that burn gasoline or diesel and spew exhaust, said Bonnie Holmes-Gen, a spokeswoman for the American Lung Association of California.
"This is something we have to do," she said. "We have a very strong science behind the understanding of the link between air pollution and premature deaths as well as heart and lung disease."
Proposition 87 says the cost of the tax - which would range from 1.5 percent to 6 percent of the value of extracted oil - will not be passed on to consumers at the pump.
Critics are skeptical. "It doesn't seem logical," said Ron Roach, director of communications for the California Taxpayers Association.
The tax will add to the cost of extracting oil, Roach said. As a result, more oil will be imported from out-of-state and overseas, and at a greater cost.
Eventually, one way or another, drivers will pay, he warned.
While AAA of Northern California has not taken a stance on the measure, its Southern California counterpart opposes Proposition 87 for similar reasons.
"We understand that supposedly any increase in the gas tax would not be passed on to the consumer," said spokeswoman Carol Thorp. "But there's no formula in the proposition to ensure that doesn't happen."
California is the third-largest oil-producing state in the nation, behind Texas and Alaska. Almost all of the oil is refined, with about two-thirds of it ultimately feeding cars, trucks and other vehicles.
Oil producers already pay tax and regulatory fees, but supporters of Proposition 87 say they fork over far less than companies in other oil-rich states.
With billions of dollars at stake, about $45 million has poured into each side of the Proposition 87 campaign. Oil companies like Chevron have led the march against the measure, while Hollywood producer Stephen L. Bing has helped bankroll the pro-87 campaign.
There's more to the argument than gas prices.
Opponents say schools and police and fire departments could suffer if oil production declines and fewer tax dollars are siphoned to state coffers. The San Joaquin Farm Bureau also is critical of the measure, saying it establishes a new bureaucracy to oversee spending huge sums with little accountability.
A cash infusion is the only way to move toward hybrid cars and electric-powered vehicles, the lung association says.
It's not just a health issue, Holmes-Gen said. In the San Joaquin Valley, bad air has been blamed for $3 billion a year in lost worker productivity, health care costs and other expenses, according to one study.
"It's a no-brainer that we need to move away from our dependence on petroleum," Holmes-Gen said.
Of the estimated $4 billion:
The former president tells a crowd of 5,000 that Prop. 87 would allow the state to do something remarkable -- save the planet.
Accusing oil companies of lying about the cost of Proposition 87, former President Clinton on Friday called "bogus" their contention that approving a tax on oil revenues would trigger higher gas prices for California motorists.
During a rally at UCLA, the former president said the state ballot measure would help California move toward less expensive, cleaner forms of energy by funding research into alternative fuels.
Gas prices are lower in other states that already have oil taxes like the one proposed by Proposition 87, Clinton added.
"California is being given an opportunity and an obligation to do something remarkable — to save the planet, improve our national security, create the next generation of good jobs for the American people," Clinton said.
The measure on the Nov. 7 ballot would impose up to $485 million a year in taxes on companies that extract oil from California land, with the money going to finance research and development of alternative energy. Over its life, the measure would raise $4 billion for grants and loans to projects developing alternative fuels and more energy-efficient vehicles.
With opponents, led by oil companies, pumping more than $52 million into the campaign to defeat the state ballot measure, supporters brought Clinton into the state just days after launching a television ad campaign in which his former vice president, Al Gore, said the measure would reduce the state's dependence on foreign oil and clean the air.
Clinton, still popular in a state that he twice won in presidential elections, will be featured in a new round of ads that were filmed during Friday's rally in front of a cheering crowd of 5,000, many of them students.
Opponents of Proposition 87 noted Friday that support for the measure is sagging, and predicted that the involvement of Clinton and Gore would not be enough to save a proposal that they say would create an unaccountable bureaucracy.
(snip)
OF COURSE IT WILL COST US MONEY. There is no free money. NO NO AND NO on 87. I'm voting NO on all of them, except 85/ Parental Consent.
Borrowing, taxes, borrowing, taxes. I'm voting NO on all of them except Prop 85 and Prop 90 (Eminent domain).
Yes, Yes on Prop 90 - eminent domain. I knew there was another. What a bunch of horse manure (and that is SO magnanimous).
Vote Yes on 1A. That's the one that prevents funds that are supposed to be used for transportation projects, highways etc. from being diverted by the Democrats in the legislature to use for their favorite socialist/welfare programs.
Jackie Goldberg is against 1A. Need I say more?
1A will probably pass but it is a feel-good do-almost-nothing initiative. It doesn't prevent them from raiding the fund; it still lets them raid it twice a decade. It also allows them to take all the unpaid balances from prior years and defer repayment by an additional 7 years (allowing them to spend the dollars on more social programs.)
There is an initiative that already qualified for the 2008 ballot that will truly STOP them from raiding the fund. I'll be voting for that one.
Absurd on its face. The supporters of Prop 87 are economic nitwits.
Do the liberals really think we are stupid enough to believe this? Are they?
And crooks.
When 5000 people show up at a pro-87 rally with Clinton, they prove their stupidity.
I'm with you. Just in the process of plowing through the language of Prop. 87 in the voter information booklet (yes I actually read those things, with a magnifying glass because of that 6-pt type).
I haven't made it all the way through and I fell asleep trying to do so but I don't like what I read. For one thing, the governing authority is largely political appointees and exempt from a lot of usual government oversight. For another, it looks like the authority has the power to immediately begin selling bonds based on future income and an upper limit on how much could be bonded ($1B) was scratched. This means that theoretically it would be possible to sell bonds for the entire amount immediately and the unrealistic 10-year goal of 25% cut from 2005 would put a lot of pressure to do just that. What is interesting is that the authority is supposed to stop collecting the levy after $4B is collected (unless the law is renewed) but there is a provision that it can still continue collecting the levy if it has outstanding debts, bonds or otherwise to service. That seems to me to be a rather blank check for it and to encourage bonding. (Perhaps some bonding experts among the freepers can enlighten me on how this works. It's a very specialized--and lucrative--business for lawfirms and bond salesmen.)
The split is also rather interesting. Those percentages are in the plan but they apply only after the "debt servicing account" is first filled from the income. And there seems to be no real limits on what the bonds can cover so while it appears the levy is split among the four interests I think the bond servicing account might well skew that split considerably.
Obviously, the university and community college groups get priority in funds to build facilities, train faculty and give scholarships to "green" teachers and students. Then government and private fleets get to collect money to reimburse them for the extra cost of buying green vehicles.
There are other interesting provisions. It amends the state constitution which makes it harder to change and it requires a two-thirds vote of both houses of the Assembly and the signature of the governor to change the law, which sounds like it might be impossible to change through that means. It also states that no one can challenge the validity of the law after six months from its effective date which would be January 1, 2007 if it passes. It also requires a two-year and ten-year plan to reduce greenhouse gases 25% over the 2005 level be finalized within nine months after the effective date of the bill so it would seem to stifle real public input and consideration. It further seems to indicate that the authority can collect the money from the producer but defines producer very broadly and it also says that if it can't collect from the producer, it can go as far as necessary down to the ultimate user which sounds to me like they could levy on gasoline pumps.
All in all it sets up quite a nice little kingdom for some lucky dictator wannabes. Pretty scary for my money. And, yes, it says that the levy cannot be passed on to the consumer and gives the authority the right to investigate what it considers unfair price hikes but the language is pretty milquetoast and not likely to be enforced if the right palms are greased.
No, no, no for my money too. I am tired of seeing parties use the initiative process to tax unpopular industries by appealing to emotions of voters and not to common sense.
It's funny how they say taxing oil will not effect prices on consumers, but before the prices were going down their would be news story's about those who drive around to their customer's and the added expense they had of higher gasoline prices, which caused them to raise their prices to their customers.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
Off Topic... this one is too hard to excerpt for a meaningful thread, but I think you'd enjoy it. Jill Stewart with Jerry Brown--unplugged, lol.
http://www.opinionjournal.com/editorial/feature.html?id=110009089
Thank you for posting the recap. I decided to vote against it based on the summary descriptions and the LAO analysis. Your post has enlightened me to yet more reasons to vote NO! The part about no one being able to challenge the validity of the law after six months is the same kind of garbage that we got through the Stem-Cell initiative which has proven troublesome. I hope this thing goes down in flames.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
You and me both. I already have my ballot marked and ready to mail!
With Gore advertising for this and Clinton making a speech on it's behalf... What more would you or anyone else have to think over on this ridiculously extreme measure?
I've pretty much decided to vote against all the measures except 85 and 90. Am I makin any mistakes?
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