California and National Elections

Oil Tax Popular in Bay Area

BERKELEY - Many Bay Area voters seem to be supporting Proposition 87, but with an hour until polls close across the state, the initiative’s fate remains uncertain.

In a Field poll released last Thursday, the No side held a slight lead of 44 percent over the Yes side’s 40 percent. The poll signaled a continued decline in support for the proposition since July. The poll had a margin of error of +/- 3.5 percent.

“87 will hopefully result in making sure that California—and by extension, hopefully, the United States—can move toward new energy sources that are more sustainable and have a less harmful impact on the environment,” said Ali Saidi, 32, of Richmond.

Proposition 87 would establish a tax on oil pumped in California. The revenues from this tax would be used to fund companies and programs that are developing alternative fuels and efficient technologies. The goal of its authors is to reduce California fuel consumption by 25 percent by 2017.

The tax would remain in effect until it raises $4 billion.

“We’ve got to put the economy in a different direction,” said Eileen Harrington, 44, of Berkeley, who also voted for the proposition.

But both Saidi and Harrington expressed reservations about the state authority the proposition establishes to distribute the tax revenues.

They hoped that the state would put some controls or regulations on the authority. As for now, “we need to move forward,” said Harrington.

The lack of clear oversight has been a point of contention for opponents of the measure.

“Where is the money going?” asked Tim Nickel, 27, of San Francisco who voted against the proposition.

While Nickel supports research in alternative fuels and reducing the consumption of foreign oil, he said he couldn’t see “putting this money in the hands of a government bureaucracy as the most efficient way to do it.”

David Reyes, 18, of Hercules voted for the proposition, but also thinks that gas prices will increase if Prop 87 passes, though he doesn’t think any increase will be significant.

Opponents claim that the tax will reduce state oil production, leading to increased foreign imports and higher gas prices. Supporters dispute this contention and point out that the initiative is specifically designed to prevent oil companies from passing the tax on to consumers. In addition, oil prices are determined by the world market, not by California production, said Severin Borenstein, the director of the University of California Energy Institute, who is not affiliated with either side of the proposition.

Nickel also expected prices to rise due to the tax, and that was a significant reason for his opposition.

“I would much rather see incentives given to entrepreneurs, given to companies, for investing in and profiting from cleaner renewable and non-fossil-fuel-based forms of energy,” Nickel added.

The proposition will also reduce funding for schools and public safety, opponents claim.

The current taxes on oil now go into the state’s General Fund, where they can be used for a variety of purposes. Proposition 87 would mandate that all oil taxes go into a special fund that can only be used to promote alternative energy. The California Legislative Analyst’s Office says any losses would probably not exceed a few million dollars for local property taxes, $10 million in state income taxes, and $15 million in state oil revenues. Supporters contend that this money is necessary to put muscle behind California’s global warming laws.

The Yes on 87 campaign’s supporters include environmentalists, venture capitalists, the American Lung Association of California, well-known Hollywood figures, and prominent Democrats like Bill Clinton and Al Gore.

The coalition opposed to Prop 87 includes oil companies, the California Chamber of Commerce, several education administrators, and firefighter and police groups.

More than $155 million have been raised by both sides of Prop 87, making it the most expensive proposition race in California history. Chevron and Aera Energy have provided most of the No on 87 campaign’s funding, with $71 million of $95 million total, while the Hollywood producer Stephen Bing has provided the bulk of Yes on 87 campaign’s $61 million by donating $50 million of his own money.

All that money has resulted in a barrage of advertisements by both sides. But those ads did not seem to influence how most voters interviewed decided to vote.

Jack Quinlan, 27, of Encinitas in northern San Diego County, didn’t care about the issue until he heard a radio ad against Prop 87 in which a voice said that the proposition “just

doesn’t make sense.” Hearing a claim like that “screams ignorance to me,” he said, “and it screams the self-righteousness that comes with oversimplification.”

“That anti-87 ad really turned me off,” he added. “That really made me curious about Prop 87.”

As a result, he found the tax on oil producers to be particularly appealing. “I am far less about alternative fuels than I am about the fair regulation of petroleum prices.”

Becca MacLaren contributed to this report.