SACRAMENTO – Assembly Member Caballero today joined students, educators, and school support staff to support a bill to fund education and reduce teacher "pink slips" by closing loopholes for Big Oil and taxing their windfall profits.

"While California is facing billions in cuts to schools, big oil companies are raking in record profits -- without paying for the oil they take from California.," Assembly Member Caballero said. "If red states like Texas, Colorado, and Montana tax oil production to fund the services they value, then so should we."

"The choice is clear," continued Assembly Member Caballero. "We can continue to offer gusher giveaways, or we can preserve smaller class sizes. At a time when we are all paying higher gas prices at the pump, and oil profits are in the billions, we can tax excessive profits and save our schools."

AB 9xxx would set a 6 percent severance tax on oil extracted in California. The revenue would be used to mitigate teacher layoffs from the Governor's proposed cuts. AB 9xxx also responds to overall petroleum industry profiteering by placing a 2 percent windfall profits tax on oil companies.

The bill would generate $1.2 billion in yearly revenue for the state, making sure California gets its fair share from record oil company profits. Oil production is one of the most profitable industries in the world, and all 21 other oil producing states in America already levy a severance oil tax at rates ranging from 2 percent to 15 percent on oil producers. Most of those states spend more per pupil on education than California.

AB 9xxx prohibits the producers or purchasers of oil from using the tax to raise prices at the pump. It gives the Board of Equalization and the Franchise Tax Board tools to keep oil companies from passing through price increases.

Legislative Democrats have already reluctantly backed $7 billion in cuts to valued state services, including Medi-Cal and Supplemental Security Income. To close the state’s remaining $7.5 billion budget deficit while preserving vital state institutions like K-12 education requires balancing cuts with new taxes and fees. Even so, Assembly Republicans recently rejected a bill that would close a yacht tax loophole, enabling the owners of yachts to avoid paying sales taxes on their boats if the vessel is kept offshore for three months.