(Sacramento) –  The same week thousands of layoff notices were delivered to teachers and school staffs throughout California Assemblymember Julia Brownley (D- Santa Monica) and all California Assembly Democrats voted for new legislation that would have reduced the number of layoffs by closing the “gusher giveaway” tax break for oil companies. But Assembly Bill 3X 9 failed to get the two-thirds vote needed for passage because Assembly Republicans voted against education and for Big Oil. Just last month the Assembly Republicans also killed an effort to close a tax loophole for wealthy yacht owners. Democrats insist the state’s multi-billion dollar budget deficit be eliminated with a mix of cuts and new revenues, not through the “across the board, spending cuts only” approach proposed by the Governor. 

AB 3X 9 would have set a 6 percent severance tax on oil extracted in California. The revenue would have been used to mitigate teacher layoffs from the Governor's proposed cuts. AB 9xxx also responded to overall petroleum industry profiteering by placing a 2 percent windfall profits tax on oil companies. It had 43 Democratic co-authors.

The bill would have generated $1.2 billion in yearly revenue for the state. 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.  

Read the additional materials below:

• AB 9xxx Oil Severance and Windfall Profits Taxes Q&A 

• California Oil Severance Tax Fact Sheet