Politicians Look to Grab More Money – While Passing on the Costs to You

By Ventura County Taxpayers Association (VCTA)

Another day, another scramble for more tax revenue in California.  

Although state budget reserves have grown to a record high of more than $15 billion, according to Ventura County Taxpayers Association (VCTA), new tax proposals keep popping up in Sacramento.

Two proposals to raise existing taxes and expand taxes into new areas illustrate how California’s elected leaders are failing to be honest with voters about the nature of the budget problems facing the state.

The first is SB246 which would impose a severance tax on oil and natural gas production of 10 percent of the average price which equates to a $900 million tax increase on Californians. Those tax dollars would flow directly into the state’s general fund to be used for anything the legislators would like.

The second is the long-anticipated effort to change Prop. 13, the landmark 1978 ballot measure limiting property tax increases to 2 percent a year, so that it no longer applies to commercial and industrial parcels. 

Proponents appear to have gathered enough signatures that voters will be asked to consider what’s known as “split roll” in 2020. This has the potential to generate an additional $6 billion to $10 billion a year in new revenue.

Local governments would get 60 percent of this windfall and school districts would get 40 percent. Advocates tout the measure as an easy way to fund new and improved city services and to boost school quality.

Both of these efforts are shrouded by smokescreens that obscure key facts.

In the case of the oil severance tax, proponents carefully obscure the fact that the severance tax would reduce local tax revenue in oil-producing counties such as Ventura, making it harder to fund local services.

The nonpartisan Legislative Analyst’s Office warned of this consequence of the oil severance tax.

California is one of the only states to base property taxes on the value of undeveloped oil reserves in the ground.  Because the tax increase would make producing oil and gas in some areas less economical, it would reduce the value of oil in the ground, resulting in lower property taxes on those oil reserves.

This would be a significant potential hit to Ventura County.  Currently, the local oil and gas industry provides $21 million in tax revenue to local jurisdictions, and they have historically been one of the top four or five property tax payers in the county.  

The state would get all the benefit of an oil severance tax while Ventura County governments would be left holding the bill.

The case for “split roll” is built on the myth that California is undertaxed compared with other states.  However, California is among the top ten states with the highest tax burden according to the non-partisan Tax Foundation.  California also has one of the highest corporate tax rates in the nation.

Prop 13 was passed in response to voter anger over past rapid increases in property taxes.  The effort to undermine Prop 13 is a transparent attempt by big-spending politicians and their allies to free themselves of the restriction placed on them by voters.

The common thread uniting both of these proposals is politicians looking to grab more money to spend while passing on the costs to you, the California taxpayer.

With the state reporting large reserves and cash surpluses, we do not need additional taxes. The answer is more accountability for how our tax dollars are spent.

We need answers on how, with all this money to spend, state services are so poor and our infrastructure is aging and outdated.  Voters should be pressing for this increased accountability rather than handing politicians yet another blank check.

The Ventura County Taxpayer Association is made up people who recognize the importance of government to our communities. Government should be efficient, effective and always transparent. If you would like to support our efforts, please click here to go to our website and join us . Thank you.