SACRAMENTO – A bill to impose an extraction tax on oil companies to fund California’s public higher education, health and human services and state parks was introduced today by Sen. Noreen Evans (D-Santa Rosa) at a student rally at California State University, Sacramento.

The tax is estimated to raise $154 billion under current production levels in the state or $2 billion a year.

“California is realizing an economic recovery but as both the State Auditor and California Budget Project have concluded, without new revenues the state remains on unstable financial footing,” said Evans. “California remains the only oil-producing state in the nation that does not impose an oil extraction tax. Meanwhile, our debts grow, our population increases, and our services are strained while new revenues from our own natural resources earn $331 million a day for big oil companies. Not taxing oil extraction is simply fiscally unsound.”

The bill, Senate Bill 1017, would impose a 9.5 percent severance tax on the extraction of oil from the earth or water within California’s jurisdiction.

Revenues would be distributed into an endowment and split three ways among the University of California (UC), California State University (CSU) and California Community College (CCC) systems of higher education receiving 50 percent to share equally; health and human services receiving 25 percent; and state parks the remaining 25 percent.

"Tuition levels are vulnerable to a fluctuating economy,” said Harrison “Jack” Tibbetts, a senior at UC Berkeley and author of the California Modernization and Economic Development Act. “The endowment avoids this reality by growing during a booming economy and protecting students and their families during the bust. Many other states who tax oil extraction use this same model and have a flourishing education system."

Tuition at the UC and CSU increased 310 percent and 283 percent respectively in the last 10 years. In 2010, California ranked 49th in the nation for the number of students who go straight from high school to college.

Earlier this year the State Auditor determined the state’s net worth to be a negative $127.2 billion and today, the California Budget Project released a report detailing more than $127 billion in state unfunded liabilities leaving California in perilous financial standing without identifying new revenue sources.

“Sen. Evans’ bill merely does what every other state and country does: tax crude oil modestly as it is produced,” said Lenny Goldberg, executive director, of the California Tax Reform Association. “We owe our citizens no less.”

Senate Bill 1017 would provide a long-term and self-sustaining dedicated revenue stream, independent of the General Fund, without impacts to taxpayers through increased income or sales taxes. In early 2014, Superintendent of Public Instruction Tom Torlakson called for an extension of Proposition 30, the short term income and sales tax increase approved by voters in 2012, in order to secure future funding for public education.

“California now needs a vision for its future,” continued Evans. “Fiscal prudence means acknowledging our debts and planning for our future. It means ending big oil’s free ride and securing revenues for students, vulnerable populations and our own natural resources.”

Evans represents the Second Senatorial District, including all or portions of the counties of Humboldt, Lake, Mendocino, Marin (caretaker), Napa, Solano and Sonoma.