The California State Assembly Appropriations Committee failed to approve an oil and gas severance tax that was expected to generate $1 billion in revenue for California’s higher education system last month.
In place of AB 656, the committee will require an annual report on the amount that would have been put toward public higher education if the tax were enforced. The Board of Equalization collects all state sales and use taxes and funds the state government, counties and special districts.
The bill, denied Jan. 21, would have placed a 9.9 percent severance tax on oil and natural gas, which would amount to about $600 million for the California State University (CSU) system and between $25 and $30 million for Cal Poly. The bill is sponsored by the California Faculty Association (CFA).
“We have not given up on our efforts to provide a stable source of funding for the CSU and will continue to forcefully and effectively pursue avenues that will provide us these needed funds,” California Faculty Association President Lillian Taiz said in a press release. “AB 656, coupled with our years of efforts to inform the public about the problems facing CSU, has placed higher education at the forefront of the state’s concerns. We will continue our efforts to ensure the long-term health of the CSU is not sacrificed in the name of short-term economic expediency.”
The opportunity to gain the required two-thirds vote for assembly passage would have only been possible with the support of assembly republicans in addition to the bill’s potential costs to the state general fund, according to the CFA press release.
Despite the bill’s dismissal, members of the CFA still consider it somewhat of a success, said CFA communication specialist Brian Ferguson.
“It was a very successful bill leading up to this,” Ferguson said. “There have been previous severance taxes that did not pass, but this cleared two committees, the education committee and revenues and tax committees.”
According to the CFA press release, the refusal of the bill’s passage was not a major loss because it has created dialogue that motivated the governor’s decision to increase the CSU budget by at least $305 million in his January budget proposal.
The CFA also supported the approval of Senate Bill 218 as a step forward in continuing legislative efforts to provide oversight and accountability of the $1.34 billion in hidden funds held by CSU campus auxiliaries and foundations. SB 218 forces university bodies such as the Cal Poly Foundation and the Cal Poly Corporation to open their books to the public.
“We are looking into all possibilities to rerunning the bill and finding other alternatives to help support our campuses and universities,” Ferguson said.