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Proposition 87: More dependence on foreign oil
and higher prices at the gas pump.

This $4 billion oil tax would make California’s oil the highest taxed in the nation, by far. Economists report that higher production taxes on California oil would reduce the amount of oil produced in-state. California would become more dependent on foreign oil. The added costs of transporting imported oil and the added costs associated with refining imported oil to meet California’s environmental standards would all be reflected in the price of gasoline at the pump.

““Gasoline prices in California are high enough already. Proposition 87 would just add insult to injury. This $4 billion oil tax would result in even higher gas prices at the pump. We recommend drivers vote: NO on 87.”
Thomas V. McKernan
President and CEO
Automobile Club of Southern California

“Proposition 87 is not a tax on oil company profits, as proponents would like you to believe. It’s a $4 billion tax on California oil production. It would make California’s oil the highest taxed in the nation, by far. Analysts report it would decrease state oil production. Replacement oil would have to be imported from the Middle East and elsewhere. The added costs of transporting and refining imported oil would be lawfully passed on to consumers at the gas pump.”
Allan Zaremberg, President
California Chamber of Commerce

“Given the speculative nature of the measure’s potential benefits, and the fact the measure does not require that the tax revenue be earmarked specifically for California projects, the long-term economic impact of the initiative is highly uncertain. In contrast, the economic impact of the proposed severance tax is virtually certain: reduced oil production in California, increased oil imports, and higher gasoline prices.”
José Luis Alberro, Ph.D.
Director, LECG

“The sponsors’ contention that Proposition 87 would not cause higher gas prices is incorrect. They ignore the additional transportation and refining costs that suppliers would have to incur in order to replace the lost oil production caused by the tax. The measure’s pass-through prohibition would have no impact on these cost-increasing factors.”
William Hamm, Ph.D.
Former State Legislative Analyst

“Proposition 87 attempts a worthy goal, but does so in a counterproductive and costly manner. It would shrink California’s oil supply, increase dependence on foreign oil, and result in higher gasoline prices.”
Professor Philip Romero, Ph.D.
Former Chief Economist
California Office of Planning and Research

“Increasing California oil taxes by $4 billion would cause further financial hardship for businesses and consumers who are already struggling with high gas prices. The more we tax in-state production, the more dependent we become on foreign oil, and the more we have to pay at the pump to get it there.”
Jack Stewart, President
California Manufacturers and Technology Assn

“Higher fuel prices hurt everyone. Drivers will have to pay more at the pump. Businesses will have to pay more to transport goods. That means higher prices for consumers.”
Bill Dombrowski, President
California Retailers Association

(Download document)


Californians Against Higher Taxes: NO on the Oil Tax Initiative 2006