Calif. Dems propose oil tax for school cuts


California is the third largest oil producing state and the only one not collecting an oil extraction tax. Given the current budget crisis, Democrats say it's time for the oil industry to pay its fair share.

"It's scary," says first grade teacher Christine Boatman.

As Boatman prepares her lessons, she's bracing for the worst. The eight-year veteran is among the thousands of California teachers who got layoff notices this week, a cautionary move in light of the impending budget cuts to education.

"I worry that they are going to be overcrowded in classes and they're not going to be able to get all the attention that they're needing," says Boatman.

To stave off the layoffs, Assembly Democrats rolled out a plan to tax oil companies six percent on each barrel extracted in California and a two percent tax on their record profits. That could mean $1.2 billion dollars a year for schools.

"It is an important step today, as these layoff notices are going now, to give reassurance to those teachers that Assembly Democrats are going to fight for them," says Assembly Speaker Fabian Nunez.

The proposal was fast-tracked through the Assembly Tax and Revenue Committee and quickly went to the floor for a vote.

Republicans support is needed for all taxes proposals, and the oil tax is especially met with resistance because they say it would increase our dependence on foreign oil.

"What this means is that now oil from Venezuela and Iran will be less expensive relative to California oil," says Assemblyman Chuck DeVore.

While Democrats point out oil extraction taxes are much higher in other states, the industry says it has to pay other taxes in California not required elsewhere.

"We also have corporate income tax. We have sales tax. We have property tax. And when you take all of the taxes that are imposed on our industry in California, we're at par, or actually more, than any other state taxed on oil," says Catherine Reheis-Boyd of the Western States Petroleum Association.

As the full Assembly began debating the oil tax, teachers like Christine Boatman are crossing their fingers.

"Everybody has a teacher. Everybody is who they are because of a teacher," says Boatman.

The Assembly is still debating that oil tax. Six Republicans need to cross over come vote time.

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