Tulare Co. Farm Bureau opposes state oil tax

By Reggie Ellis

The Tulare County Farm Bureau voted unanimously last week to oppose an oil tax it claims will create a huge state bureaucracy and eventually increase the cost of gasoline.

Known as the Oil Tax Initiative, Proposition 87 would generate $4 billion over at least 10 years to fund alternative energy programs if approved by voters in the November election.

&#8220With predictions of possibly $4-per-gallon gasoline in our future, the agricultural community, which already has received a body blow of losses following July's record heat wave, cannot be expected to absorb any increased costs for fuel,” said Tulare County Farm Bureau President Keith Watkins. &#8220Prop. 87 would only drive our fuel costs up even higher and put us at an even greater competitive disadvantage than we are today.”

Representing the interests of the leading dairy-producing county in the nation and the second-leading agricultural producing county in the state, the Tulare County Farm Bureau represents more than 2,000 family farmers and is dedicated to public education and advocacy on behalf of its diverse membership.

With California's oil among the highest taxed in the country, many economists report that higher taxes on in-state oil production would be bad for all sectors of the state's economy.

The Legislative Analysts Office said the tax would equal between $2.17 and $4.20 per barrel of oil, with an average of $70 per barrel. That would generate between $225 million and $485 million annually, based on 2005 oil production. That only includes oil produced in California, which could rapidly be reduced and increase the state's dependency on imported oil.

The measure states that oil producers will not be allowed to pass on the cost of the tax to consumers by increasing the cost for oil, gasoline or diesel fuel. However, by reducing in-state oil production California could become more dependent on foreign oil. Oil from the Middle East, for example, costs more to get here and more to refine once here. These added costs of transporting and refining imported oil would be lawfully passed onto consumers at the gas pump.

&#8220In agriculture our costs are determined locally but our prices are set globally,” said Joel Nelson, president of Exeter-based California Citrus Mutual. &#8220California farmers already have the highest production costs in the world. Adding a new fuel tax to the mix doesn't make sense, especially when we can expect nothing in return.”

The LAO's analysis stated that the tax would reduce revenues from local property tax, state income tax and fuel and sales tax. However, these might be offset by the potential for investment in new alternative fuel technologies.

Prop. 87 also reorganizes the California Alternative Energy and Advanced Transportation Financing Authority into a nine-member board of political appointees, not elected officials, who the Farm Bureau said have &#8220no accountability to taxpayers” The Farm Bureau also claims that the proposition is written in such a manner as to make the new bureaucracy self-perpetuating with no formal process for allocating funds.

While the measure is supported by a long list of alternative energy companies, environmental groups and heath organizations, it is also supported by several agricultural groups including the American Soybean Association, California Farmers Union, Community Alliance with Family Farmers and the National Corn Growers Association. For more information on Proposition 87, contact the Secretary of State's office at (916) 653-6814 or visit the website at www.ss.ca.gov.

Start typing and press Enter to search