2012: California referendum to capture oil drilling revenues

This is the text of a proposed California ballot initiative:

Oil Extraction Tax to Rescue Education
Maintaining California's competiveness in the new global economy

California's Educational System, Kindergarten through College and University, has been cut to the bone.  Overcrowded classrooms, textbook shortages, teacher and professor lay-offs, and reduced or eliminated college class sections have made it impossible for millions of talented students to graduate.  For example, Long Beach Unified School District eliminated computer literacy classes as a graduation requirement.

University of California student's' tuition fees are being raised 8% and California State University students' tuition fees are being raised by 15% percent for Fall 2011.  California Community College students are facing a proposed tuition fee increase of 38% (to $540) per semester minimum, up to 154% ($990) per semester for fall 2011.  Californians must act now to save our once world renowned Educational System.

Education is the foundation of a strong economy.  California Governors Pete Wilson and Arnold Schwarzenegger enjoyed tuition free education at UC Berkley and Santa Monica College, respectively. In the 1960s and 1970s, California's Educational System was the envy of the world. During this time, public higher education was essentially tuition free, as mandated by Governor Pat Brown's Master Plan for Higher Education, and California's economy grew to the 5th largest in the world, supporting a large vibrant middle class.

Today, California's middle class is endangered, and California's economy has fallen to 8th position in the world because of a lack of investment in education and technology.  China recently invented the world's fastest computer (server) and produces the largest number of solar panels, while South Korea produces the best electric car batteries using cutting edge technology.  California's K-12 spending per pupil has dropped to 43rd out of 50 states.  College and university graduates are saddled with huge debt.  If California is to successfully compete with states and countries such as China, Japan, Germany, South Korea, and India, California's Educational System must again be adequately funded, offering more classes and programs in cutting-edge technology, skilled manufacturing, alternative energy, and the arts.  California Community Colleges need adequate funding to continue training Nurses, and preparing Firefighters and Teachers.

Unbelievably, California has failed to employ a widely used revenue source that can address this crisis in our education.  This revenue source is employed by every major oil producing state, except California.  This untapped source of revenue is an extraction fee on oil pumped in California, onshore and offshore.  Since California is the nation's third largest producer of oil, after Texas and Alaska, a 15% oil extraction fee  (midway between that of Texas and Alaska) would raise approximately $3.6 billion each year, at 2011 oil prices.  This has not been a partisan issue in other states.  For example, Governor Sarah Palin, with a Republican legislature, raised Alaska's oil extraction fee to 25%, bringing in billions of dollars.  Texas's and Alaska's gasoline prices were not affected by their oil extraction fees, and in March 2011, their price per gallon of gasoline was lower than California's.  From 1901 to 2008, oil companies have extracted over 10 billion barrels of oil from California's territory.  Based on 2011 per barrel crude oil prices ($100 per barrel), oil companies have extracted over $1 trillion worth of oil.  At the current world market price, this oil extraction fee would have raised over $150 billion.  This type of fee is the economic standard in every major oil producing state and nation around the world.  California can no longer afford to give preferential treatment to oil companies compared to how they are treated elsewhere.

This initiative requires that California apply a 15% oil extraction fee on the value of each barrel of oil, California's common resource, extracted onshore and offshore.  Following Texas' example of devoting this oil revenue to its Educational System, the revenue generated by this fee shall be appropriated for non-capital purposes in the following amounts:  K-12 shall receive 30% (approximately $1.08 billion). The California Community College System (approximately 3,000,000 students) shall receive 48% (approximately $1.72 bill).  The California State University System (approximately 412,000 students) shall receive 11% (approximately $400 million).  The University of California System (approximately 200,000 students) shall receive 11$ (approximately $400 million).  This will reduce college and university tuition fees, and restore cut class sections.  The funding increases will pay to rehire professors, laid-off teachers, and reduce K-12 class sizes.

This proposition, along with existing anti-trust and anti-collusion laws, prohibits oil companies from passing on the oil extraction fee to oil refineries, gasoline stations, and consumers (the U.S. Supreme Court has ruled that States can prohibit oil companies from passing on fees such as this to consumers).  This fee will enable California to capture $3.6 billion that would have left California.  This additional money will help rejuvenate California's stagnant economy.  This fee will have minimal impact on oil company profits which total in the hundreds of billions of dollars.  For example, Exxon Mobile reported record profits of $45 billion in 2008, and Shell Oil reported profits of $31 billion in 2007.

If oil companies illegally pass on the oil extraction fee, a fine shall be assessed equal to the amount passed on.  The dollar amount recouped shall be equally distributed to each Californian as a rebate check at the end of each year.  The State Attorney General is bound by this proposition to examine the books of oil companies operating in the state of California, if they appear to be breaking this law.

The revenues from this proposition exclusively constitute a Competiveness Education Fund and cannot be commingled with, or lent to, the State General Fund.  The State shall not be allowed to reduce its regular education funding corresponding to the additional revenue produced by this proposition.  The revenues from this Competiveness Education Fund shall be deposited in a Special Account and distributed, on a monthly basis, by the California State Treasurer to each of the California Educational Systems involved.  Passage of this proposition will once again ensure a bright future for this generation and succeeding generations of Californians who have to compete in the new global economy.

Organizations supporting the referendum effort include labor unions, teacher and student associations, and progressive political groups. Anyone interested in participating can download a petition here and flyers here. For more information, visit the sponsoring organization at Rescue Education California.

Ending 'The Long War': Vigils Against War Funding Spread Across the Nation

Brownbaggers Not Teabaggers

On January 20th, Progressive Democrats of America organized "brownbag" lunch vigils against war funding at noon at the district offices of 22 members of the U.S. House of Representatives.

On February 17th -- next Wednesday -- Progressive Democrats will be joined by CODEPINK, Democrats.com, AfterDowningStreet, the California Nurses Assn/National Nurses United, and United for Peace and Justice in holding brown bag lunch vigils outside (or, better yet, inside) at least 36 congressmembers' offices.

What Needs To Be Done:
Brownbaggers are asking members of the House to publicly commit to voting No on any bills that fund wars in Iraq, Afghanistan, Pakistan or Yemen, and to publicly urge their colleagues and the House leadership to make the same commitment. As lesser steps in the same direction, representatives are being asked to cosponsor HR 2454, calling for an exit strategy from Afghanistan, and HR 3699, prohibiting any increase in the number of U.S. Armed Forces in Afghanistan. Congressmembers' commitments are tracked at DefundWar.org.

"We have to choose between jobs and wars," said Tim Carpenter, national director of Progressive Democrats. "The American people are on one side, but our so-called representatives in Congress are on the other. The Supreme Court is busy increasing corporate control of our elected officials. We need to be busy enforcing the people's control before it is too late."

"Without wasteful war and military spending," said deputy director Laura Bonham, "we could have healthcare, jobs, housing, education, retirement security, environmental sustainability, diplomacy and foreign aid. No longer will we take seriously anyone's claim to support these things while voting to fund more war."

Learn more about brown bag lunch vigils.

Brownbaggers are demanding commitments to vote against more money for war. Slogans on their posters include: "Healthcare not Warfare," "Corporations out of Politics," "Bailout Main Street not Wall Street" and "Brownbaggers not Teabaggers."

Vigils have been planned in the following districts: AZ-5, CA-6, CA-9, CA-10, CA-18, CA-22, CA-23, CA-40, CA-42, CA-45, CA-46, CA-48, CA-50, CA-53, FL-9, FL-10, FL-17, ID-01, IN-9, MA-1, MA-2, MA-3, MA-10, MI-9, NY-18, NY-28, OH-13, OH-17, PA-02, PA-7, PA-15, WA-2, WA-3, WA-6, WI-3, WI-7. These are almost all at noon on Wednesday the 17th, but a few are at odd times, so check the brown bag lunch vigils schedule for details.

Here's how to get involved:

1. Find a brown bag lunch vigil near you. If you don't see a vigil near you, look below to see how to create one.
2. Download the Healthcare NOT Warfare flyer and the Why do we need brown bag lunch vigils? flyer. Customize the BBLV flyer for your group, and make copies of both flyers. Grab your promotional Healthcare NOT Warfare materials.
3.Go to the National Priorities Project to find data on the actual cost of the wars and on the social programs your community could have funded with those tax dollars. Use these figures to make signs for your vigils.
4. Spread the word! Write about your brown bag lunch vigil on your blog, Facebook, and Twitter.
5.Don't forget your brown bag lunch and Healthcare NOT Warfare stickers. Take your lunch in PDA's Healthcare NOT Warfare canvas tote!

To create a BBLV event:

1. Schedule your brown bag lunch vigil here. Your vigil will be promoted to our calendar so others can find you. For more information, contact the team at bbv@pdamerica.org.
2. Send a personalized copy of this letter on defunding our wars to your representative and this letter on war defunding to your senators. Find your representative and senators here. Or schedule an in-person meeting with your member of Congress or the legislative aide on miltary issues to determine your representative's or senator's support.
3. Report on activities and developments pertaining to your lobbying effort using the brown bag lunch vigil Google document. Check coalition partner AfterDowningStreet.org's DefundWar.org to see how your legislators have voted on war funding.
4. Submit articles for publication on the Progressive Democrats website detailing your experiences to Laura@pdamerica.org. It is especially important to share what works and what doesn't with other activists.

Print useful anti war information from DefundWar.org.
Print these posters:
Brownbaggers Poster 9
Brownbaggers Poster 10
Brownbaggers Poster 11

Thanks to AfterDowningStreet and Progressive Democrats of America for their leadership.

California Taxes: When You Hear the Word "Reform," Reach for Your Gun

The “blue ribbon” California State Commission of the 21st Century Economy, chaired by Republican heavyweight Gerald Parsky, was created by Gov. Schwarzenegger to provide bipartisan recommendations for changes to California’s tax system. According to Jean Ross, executive director of the California Budget Project, the commission is recommending "a massive shift in the cost of financing public services from the wealthy and corporations to middle-income families."

Writing on Calbuzz, Ross says

the biggest winners would be the state’s millionaires, who would receive personal income tax breaks averaging $109,000 per year. The biggest losers would be middle-income families who would receive a tiny, if any, reduction in their personal income taxes and who would pay substantially more for goods and services due to the new “value-added” tax the commission proposes to replace revenues lost due to the tax cuts for the wealthy and repeal of the corporate income tax.

The magnitude of the shift proposed by the commission is nothing short of stunning. The changes to the personal income tax structure alone would reduce income taxes paid by the poorest 62 percent of California taxpayers by $4 per year, on average, while providing six-figure breaks to the millionaires. The bottom 81 percent of the income distribution – the vast majority of all Californians – would receive 10 percent of the personal income tax cut, while the top 0.2 percent would receive 27 percent of the benefits.

And that’s the “good news.” The commission would repeal the corporate income tax and the state’s portion of the sales tax and replace it with a new tax on business net receipts – a tax that has never been tried anywhere in the US – that the commission’s own consultant notes would raise prices of goods and services, while exerting downward pressure on wages and benefits.

"Reforms" would "flatten" taxes

Specifically, the commission wants to tax groceries to pay for tax cuts for millionaires, and would tax child care so that oil companies no longer have to pay corporate income tax. Proposed changes would encourage relocation of California jobs to firms outside California, beyond the reach of California’s tax collectors. Interestingly,

the commission’s own estimates predict that revenues raised by the new tax system would grow more slowly over time than those raised by the state’s current tax system. Thus, the commission’s recommendations would lead to larger, not smaller, budget shortfalls in the future.

Over the five-year period covered by commission estimates, the difference in revenue growth would be substantial – the increased deficit under the proposed tax code would be approximately equal to what the state spends for today for the University of California and California State University systems combined.

Finally, Ross points out that more straightforward reforms that would increase revenues, such as aggressively pursuing collection of sales taxes from out-of-state retailers (out-of-state businesses pay no taxes, giving them an unfair competitive advantage against California companies) or extending the state’s existing sales tax to a broader array of services while lowering the overall sales tax rate, were ignored by the commission. "Similarly, the commission could have used tax policy as a tool to mitigate, rather than exacerbate, the widening gaps between the top and middle- and top and lower-income households." The governor's commission may have been "bipartisan" (the commission has 14 members, seven appointed by the governor, seven by the legislature), but how well the interests of middle-class and working-class citizens were represented is open to question.

Go. Read. What’s Wrong with the Parsky Panel Tax “Reforms” by Jean Ross (Calbuzz 2009-09-14) and The California Budget Project’s analysis of the Commission’s proposals (pdf)
Also, California State Commission of the 21st Century Economy: Staff Presentation: Proposed Tax Structure (pdf 2009-09-14)
California tax panel set to recommend sweeping, controversial changes (Sacramento Bee 2009-09-15)
California tax overhaul plan almost ready (LA Times 2009-09-15)
Our View: Tax fix would do more harm than good (Marysville CA Appeal-Democrat 2009-09-15)
State tax reform panel blew its opportunity by Michael Hiltzik (Los Angeles Times 2009-10-05)

Thanks for the tip on this story from California State Senate candidate Cindy Varela Henderson.