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League of Women Voters of California Education Fund
Police and Fire Public Safety Oil Production Act
City of Long Beach
Municipal Code Amendment - 2/3 Majority Approval Required
Pass: 15,423 / 70.0% Yes votes ...... 6,609 / 30.0% No votes
Index of all Measures
|Information shown below: Summary | Impartial Analysis | Arguments ||
Shall Proposition H, the Police and Fire Public Safety Oil Production Act, which amends the Long Beach Municipal Code to provide dedicated funds for police officers and firefighters by assessing an additional twenty-five cent ($0.25) per barrel special production tax on oil producers in Long Beach, with a CPI adjustment, be adopted?
The Way It Is Now: Currently, oil producers in the City pay business license a tax of $.15 per barrel, as provided under the Long Beach Municipal Code. This fee was set in 1990 and has not changed since then. The tax applies to all producers of oil from any well located in the city, including the City of Long Beach when functioning as a unit operator. Other oil-producing cities impose similar taxes; Signal Hill imposes a tax of $.60 per barrel, Seal Beach $.58, and others charge from $.20 to $.34. The proceeds can be used for any purpose.
What Measure H Would Do:
Presently, the City of Long Beach imposes a fifteen cent per barrel tax on the business of oil production from wells located in the City of Long Beach. The proposed Municipal Code amendment would impose an additional tax of twenty-five cents per barrel on that production (the "special tax"). The special tax would be further adjusted for inflation/deflation as measured by the Los Angeles+Riverside+Orange County Area Consumer Price Index. In the event that the price per barrel (as reported on the West Texas Intermediate Crude Index) falls below twenty dollars for any month, the special tax would be suspended for that month. The proceeds from this special tax may only be used for police officers and firefighters, and related costs including, but not limited to, equipment, facilities and training.
|Arguments For Proposition H||Arguments Against Proposition H|
|A YES vote on Measure H will generate an additional $3.8 million for our fire and police departments at no cost to taxpayers.
Measure H increases the charges that oil companies pay to the city for oil extracted from Long Beach.
Measure H requires this additional money be used only for public safety funding.
Measure H is not a tax on consumers; it is a payment to our city by oil companies in exchange for crude oil taken from within the City of Long Beach.
A YES vote on Measure H means increased funding of $3.8 million for Police and Fire Departments, at no cost to taxpayers. No wonder Measure H is endorsed by Mayor Bob Foster, Long Beach Firefighters Association, Long Beach Police Officers Association, City Auditor Laura Doud, and the Long Beach Area Chamber of Commerce.
Laura L. Doud
At current and recent levels of oil prices - conservatively at least 50 dollars per barrel - a change to the Culver City oil tax formula - 1.8 percent of gross receipts - would increase the city's annual revenue by over 11 million dollars - not merely under 4 million. The City Council could as easily have presented us this or another fair and practical oil tax alternative which would be far more lucrative than Prop. H's proposal.
Indeed proponents' facts show that Long Beach's total tax on oil, even after Prop. H, would still remain lower than Signal Hill's existing tax, let alone Culver City's. Prop. H is being promoted as a wonderful windfall for public safety, but in fact its 'updated' tax will quietly keep Long Beach a low-tax haven for oil producers.
Vote NO. Tell Council and all the sweet-talk sweet-deal politicians to get real on both public safety and oil taxes. Get more police on our streets now! Impose lucrative oil taxes that can really help!
|Prop. H is a sweetheart deal masqueraded as aid to 'public safety'.
If you oppose all taxes, then vote NO. But if you favor genuine fair-share taxation, not fake taxation, again you should vote NO.
That's because Prop. H only pretends to restore a fair amount of oil tax revenue to the city. The proposal would up the city tax on each barrel of oil produced, from 15 cents to 25 cents, to be adjusted annually for inflation by the local consumer price index (CPI). Both the raise and the adjustment are farcically low.
The 15 cent tax originally aimed to capture about 0.6 percent of gross receipts, for oil priced $25 per barrel. The same percentage would now make the tax close to 50 cents per barrel.
In fact, a percentage tax would be fairer and simpler than a fixed per barrel tax. Still highly affordable for oil producers, it could be far more lucrative for the city. Culver City now uses 1.8 percent. Prop. H's tax does not even restore the original 0.6 percent.
Unlike a percentage tax, a fair per-barrel tax requires adjustment for price changes. Prop. H however uses general inflation (CPI) rather than what we may expect for annual rises in oil prices. Historically oil has been cheap, hence widely used, so oil price changes have well matched the CPI. However, oil will phase out and get relatively ever more expensive. The economy will get ever more efficient and use less oil. Hence, in future the CPI will undershoot oil price increases. So, use of the CPI is yet another recipe for a farcical tax.
Vote NO: if we have a tax, let it be fair and lucrative and really aid public safety.