Create Jobs, Save Education with Oil Severance Tax by Peter Mathews

Published in Random Lengths News, March 8-21, 2013.

By Peter Mathews, Professor of Political Science at Cypress College and a radio and TV political analyst. Mathews co-founded Rescue Education California.

California’s oil, the Black Gold that belongs to all of us, is a limited natural resource that will run out eventually. A small portion of it, in the form of a 15 percent oil severance tax, must be used to rebuild our education and economy, and make California the Golden State once again.

California is the only major oil producing state with no oil severance tax! Other major oil producers, Alaska and Louisiana, have taxes of 25 percent and 12.5 percent, respectively. It is past time that we impose a 15 percent severance tax on crude oil that is extracted from California. This will generate approximately $3 billion annually to be invested in California public education and job creation. Louisiana’s oil severance tax helps fund its schools. Texas generates about $2 billion annually for its universities from its oil severance tax. Public university tuition in Texas is significantly lower than tuition at California public universities.

Since oil is bought and sold on the global market, Californians are already paying for the oil severance taxes in other states and countries in the price of a gallon of gasoline. A UC Berkeley study found that if the oil companies were able to pass on the cost of the California oil severance tax to consumers in California and around the world, the price of gasoline would go up by less than half a cent per gallon in California. A gallon of gasoline is lower in both Texas and Louisiana, despite the oil severance tax.

Part of the $3 billion generated by California’s oil severance tax must be used to rehire thousands of K-12 teachers, counselors, librarians, reduce overcrowding in classes, keep and expand science and computer lab programs, and bring back arts, theatre, and music classes. We must keep schools open for after school programs, including tutoring, homework clubs, sports, and arts. This will keep young people motivated and excited about achievement in education and life.

Another portion of the $3 billion should be used at the community college and university levels to restore cut classes and sections, lower tuition fees, and rehire professors. We must meet  increased student demand by expanding enrollment, including in programs such as nursing, engineering, math and sciences, social sciences, the arts, the humanities, and technical fields such as informational technologies, transportation technologies, and alternative energy and other green technologies. We also need to make investments in apprenticeship programs, and trade and technical schools.

The final portion of the $3 billion must be invested in California’s infrastructure, public sector, and to generate small business growth. Learning from FDR’s New Deal, we must establish a California Works Progress Administration (CWPA), and fund it to rebuild our roads, bridges, sewer systems, public transit, and levees; for example, the levee system near Sacramento, which is in dire need of strengthening. It has been estimated that if these levees break, tremendous flooding will destroy property in the area, cause destruction of crops in the Central Valley, and cause severe water shortages in Southern California.

We can add community based police, rehire laid off firefighters, public librarians, and others. We should create a California Small Business Administration (CaSBA) that will provide direct, low interest rate loans to grow small businesses. It can be modeled after President Obama’s Direct Student Loan Program which lowered the interest rate from approximately 8 percent to 3 percent, saving the students money, and expanding the program.

Education and jobs allow us to pursue Life, Liberty, and Happiness in our lives. Without access to high quality, critical thinking, and technical education, we will not have high paying jobs based on new sustainable technologies. Without these jobs in our economy, we will not have the tax base to fund a strong public education system, from pre-kindergarten through trade and technical school, community college, and university. Jobs and education are the twin engines that will boost us to the next higher standard of living, and we must fully fund them once again.  ♦

Contact Peter Mathews at (562) 234-3319 or visit him at