The wee island nation of Fiji managed Wednesday to back down a California-owned company and extract a fee of 8 US cents per liter on Fiji Water. The state of California can't even manage to back down Big Oil and charge a few cents a gallon on oil pumped out of its public lands. Jerry Brown, are you listening?
The Fiji Water story was the David and Goliath tale of the day. But Fiji Water owners Lynda and Stewart Resnick apparently lack the lobbying might of Chevron, Exxon and their Big Oil friends. The oil lobby has swatted like so many flies California's attempts to impose a fee that every other major oil-producing state collects.
Alaska's extraction tax is up to 25%, hauling in $6 billion a year, keeping the state budget in the black and helping pay out up to thousands of dollars per Alaskan every year as an oil-wealth bonus.
It's not like Californians haven't tried. A 2006 ballot intitiative, Proposition 87, would have collected 1.5% to 6% of the value of oil pumped from California to fund green energy–a maximum of about 3 cents a liter at current oil prices. Initially popular, it was cut down by a withering, duplicitious ad campaign funded largely by Chevron, Exxon, Occidental Oil and Shell.
A few brave state legislators introduced similar bills as California descended into a deficit mire. Chevron gave lavishly to the pet causes of Gov. Arnold Schwarzenegger and oil interests spent millions lobbying the state Legislature to make the extraction fee go away without even a vote.
Now California's budget is about to be $25 million in the red, after fake attempts by the last Legislature to fix the deficit. Incoming Gov. Brown has foolishly said he can fix the deficit without new taxes. But I suspect there aren't many ordinary voters who oppose an oil extraction tax these days–a recent poll found that if there have to be new taxes, a plurality would tax oil companies first. An extraction tax is not in the same league as the property tax, and won't even raise gas prices if it's structured right. It's a billion dollars or so a year laying on the ground right in front of the new governor.
So, Gov-to-be Brown, whose day are you going to make? Chevron's or Californians'? Can you match the guts of Fiji?