A proposed tax on oil extracted from the ground in California passed a key Senate appropriations committee Wednesday.
The bill, by Sen. Noreen Evans, would place 9.5 percent oil severance tax in place that would raise about $2 billion dollars that would fund higher education expenses and reduce tuition.
The bill is backed by numerous student groups and social service organizations. They say other states have an oil extraction tax which is a tax on companies who use the state’s natural resources.
Opponents of the tax say it would hurt the economy and is not needed because a temporary sales tax increase passed by voters has resulted in a budget surplus.
Oil company representatives say it’s not fair to single out one industry to solve the problem of higher education funding.
Evans says the tax may affect oil company profits but would not be reflected in prices at the gas pump because prices are determined globally.
Evans says a key obstacle now is getting a two-thirds vote on the floor of both houses of the legislature for her urgency measure. Oil interests say it may be especially difficult in the Senate where three Senate democrats have been suspended or placed on leave because of criminal proceedings against them. They are not allowed to vote. Without those votes democrats no longer hold a two-thirds majority advantage.