Tax Oil Companies, Not Students


Posted on 04 March 2010

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By Robert Cruickshank

As protests unfold across the state and the nation yesterday against cuts to education and fee increases, more attention is finally being drawn to the massive crisis facing our students, our schools, and our future.

20 years ago a year at UC Berkeley cost just over $1,000 in fees. Even that was much higher than the $0 cost that the 1960 Master Plan pledged. The early 1990s saw a big rise in fees, and by the time I started at UCB in 1997 the cost had risen to over $4,000 a year. Now the cost is slated to rise to a whopping $10,000 per year, something many students and their families cannot afford to pay. And even as those costs rise, including at CSU and community colleges, classes are being cut as educational quality declines.

It's no way to run a state. California's current prosperity is owed largely to the investments Pat Brown made in the 1960s, building a public higher education system that was the world's envy - and that fueled our innovation and economic creativity. But instead of renewing those investments for a new century, Arnold Schwarzenegger is destroying them. The fee increases are a massive tax increase on the young and on the working- and middle-classes. They must be reversed.

The only way they will be reversed is to generate new revenue. That's why the Courage Campaign, where I work as Public Policy Director, is joining the California Faculty Association and the University of California Students Association in launching our pledge to support AB 656, the oil severance tax for California.

AB 656, authored by Assemblymember Alberto Torrico, would generate $2 billion a year for higher education by levying a 12% tax on the extraction of oil and gas in California. Texas uses this tax to fund higher education there, and Sarah Palin increased Alaska's oil severance tax in 2007 in order to buy the love of her constituents. Every major oil producing state in the union has an oil severance tax - except California.

The result of this massive tax break we give to oil companies is the destruction of our public colleges and universities. Fees have risen since the early 1990s only because of cuts in the amount of state funding the schools receive. The only way to make college affordable again is to increase that funding. An oil severance tax is a good place to begin.

Stand up for students, for faculty, for staff, and for higher education by taking the pledge to support AB 656 today. We will use these pledges to help convince the legislature to pass the bill, adding to the fact that 2/3rds of Californians said they'll pay higher taxes for education. Let's tax oil companies, not students.

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Robert Cruickshank is a historian, activist, and teacher living in Monterey. He is a contributing editor at Calitics.com and works for the Courage Campaign, in addition to teaching political science at Monterey Peninsula College. Currently he is completing his Ph.D. dissertation in US history, on progressive politics in San Francisco in the 1960s and 1970s. This article was originally published in Calitics.

You make some decent points - points I would agree with (although I don't trust our legislature with the management of an oil severance tax directly. It would then become just another income source for them that they would build in to their baseline, and since it is a depleting source they'd build themselves a disaster when all the oil was pumped. Far better we do something like the Norway Sovereign Wealth Fund

http://www.guardian.co.uk/business/2009/sep/20/norway-sovereign-wealth-fund

in which the legislature and the governor would have to keep their grubby little hands off the capital and content themselves with the interest and dividend income flow from the fund. That way it would never run out which would force more cuts or tax increases somewhere else.

But then you go and put in some TOTALLY STUPID comment like this.

Fees have risen since the early 1990s only because of cuts in the amount of state funding the schools receive.
(Boldface added for emphasis)

Are you sitting there trying to tell us that there have been no raises or increased benefits to UC and CSU staff since the 1990s? In the 2006 biennium the UC alone had over 17,000 employees making over $100,000. In 2008 the number was 21,000. How many did they have in 1990?

We definitely need to tax the oil companies more in the future. they are making all the money.

I would like to reproduced your article, so that more people would see it.

For a PhD candidate, your research skills are atrocious.

we will use these pledges to help convince the legislature to pass the bill, adding to the fact that 2/3rds of Californians said they'll pay higher taxes for education.

Going to your own source one finds that two-thirds of people wanted to spare K-12 education and were willing to increase taxes to do so. Higher education had lesser support.

The exact statement, cut and pasted in:

When asked which of the four main areas of state spending they would most want to protect from budget
cuts, 58 percent choose K–12 public education—the area most Californians have wanted to spare each of the nine times PPIC has posed the question. Fewer choose health and human services (17%) or higher education (15%). Far fewer choose prisons and corrections (6%). Californians back up these views when asked if they would be willing to pay higher taxes to maintain current funding for these areas:
 K–12 public education: 66 percent yes, 32 percent no
 Higher education: 50 percent yes, 48 percent no
 Health and human services: 50 percent yes, 47 percent no
 Prisons and corrections: 11 percent yes, 87 percent no
Across political parties, and regional and demographic groups, residents are most willing to pay more
taxes to maintain funding at K–12 schools, with 79 percent of Democrats, 58 percent of independents, and 49 percent of Republicans saying they would be willing to do so. Prisons and corrections garner less than 15 percent support for higher taxes across parties, regions, and demographic groups.

If you actually READ the document:
http://www.ppic.org/content/pubs/survey/S_110MBS.pdf

K-12 education is the only thing that over half of the public is willing to increase taxes to support. 47% of the people opposed a tax increase to fund higher education and 47% opposed a tax increase for social services. That isn't much of a mandate for anything other than K-12 education.

Perhaps AB 656 should be rewritten to send the money to K-12 education instead of to higher education.