The Associated Students Inc. senate is in support of establishing a tax for profitable oil and gas companies in California.
Senators Roxanna Gracia, Mark Rizk and George Lam wrote the resolution supporting AB 1326 California’s higher education and endowment corporation: oil and gas severance tax.
The resolution passed on its first two readings and will have its third and final reading this Wednesday at the ASI senate meeting.
Assembly Bill 1326 would implement a 12.5 percent tax on oil and gas companies that make an excessive amount of profit.
“We are currently facing budget cuts that have deeply affected the CSUs and this tax would raise about 2 billion dollars that would be allocated to the UCs, CSUs and the community colleges,” Gracia said.
AB 1326 is modeled after current Alaskan and Texan law.
The money raised would go to California’s Higher Education Fund, which would then allocate funds to the California Community Colleges, the Cal State University and the University of California.
According to the resolution, tuition has risen 60 percent since the 2007-08 school year. The senators noted that students are not seeing more for their money. Class selection has fallen and student services have not been improved, resulting in students being “denied opportunities from reaching their full potential.”
As it stands now, oil and gas companies in California do not get taxed on revenue earned.
According to Gracia, the issue was brought to the senators’ attention at the California Higher Education Student Summit, CHESS.
“We lobbied for higher education and this was one of the bills they advised us to discuss with the assembly members and senators,” Gracia said.
California faces a budget crisis of $25.4 billion, which is comprised of $8.2 billion for the current 2010-11 year and $17.2 billion for the 2011-12 budget year, according to the resolution.
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