California Proposition 87 (2006)
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California Proposition 87 was on the November 7, 2006 ballot in California as an initiated constitutional amendment, where it was defeated. It failed, with 4,635,265 votes (54.6%) against it to 3,861,217 votes (45.4%) for it. Prop 87 would have allotted $4 billion for alternative energy research and imposed a profit tax on energy companies.
Campaign spending on Prop 87 set a record, with a total of $154.3 million coming from both sides.[1]
The primary sponsor of the measure was Californians for Clean Alternative Energy, which spent approximately $62 million on the campaign urging voters to approve the measure. Much of the campaign's funding came from one individual, Stephen Bing, who contributed $49.5 million.[2] According to the Los Angeles Times, Bing's contributions to Prop 87 amounted to "the biggest single personal investment in a ballot proposition in state history".[3]
The primary organization opposing the measure was Californians Against Higher Taxes-No on 87, which spent $94 million. Much of that campaign warchest came from energy companies, with Chevron providing $38 million, AERA Energy donating $32.8 million, and Occidental Oil & Gas donating $9.5 million. Altogether, $93.2 of the $94 million spent against the measure came from the oil & gas sector.[4].
Altogether, 13 ballot propositions appeared on the November 2006 general election ballot in California. Prop 87 is one of the six ballot measures that failed.
Objective of the initiative
The measure would have imposed a severance tax, effective in January 2007, on oil production in California to generate revenues to fund $4 billion in alternative energy programs over time. (The term “severance tax” is commonly used to describe a tax on the production of any mineral or product taken from the ground, including oil.) The measure defines “producers,” who are required to pay the tax, broadly to include any person who extracts oil from the ground or water, owns or manages an oil well, or owns a royalty interest in oil. The measure would have prohibited oil & gas companies from passing the tax onto consumers (although detractors argue that it is impossible to achieve such an objective).
Arguments for the initiative
Supporters of Prop 87 argued that:
- California is the third-largest oil producing state and the only state that does not collect an oil extraction fee. Oil companies pay billions of dollars in drilling fees in Texas, Louisiana and Alaska.
- California is the number one oil-consuming state. Fifty percent of the state's imported oil comes from Saudi Arabia and Iraq.
- California consumers pay among the highest gas prices in the nation.
- California air quality is the second worst in the nation. Pollution from gas powered vehicles is responsible for hundreds of thousands of cases of asthma and lung disease each year
- Prop. 87 prohibits oil companies from raising gas prices to pass the tax on to consumers.
- It provides consumers with rebates to buy clean cars and use clean energy.
- It will make oil companies pay for cleaner energy, create thousands of jobs, and reduce air pollution.[5]
Arguments against the initiative
- Prop. 87 is not the way to advance needed energy alternatives.
- It would spend $4 billion to fund a new state bureaucracy of 50 political appointees that is not required to produce results or be accountable to taxpayers
- It allows the Authority to operate outside the state budget review process and the normal checks and balances that govern other agencies.
- It allows the sale of billions of dollars in bonds it may not be able to repay and could force a state bailout at taxpayer expense.
- Prop 87 does not require all the new taxes to be spent in California, much less in the U.S.
- Economists report that higher taxes on in-state oil production would reduce in-state oil production and increase dependence on oil from the Middle East.[6]
Campaign finance fine
Aera Energy agreed on November 2, 2007 to pay a $15,000 fine to the Fair Political Practices Commission in California because it did not properly disclose through electronic filings three contributions totalling $5 million it made to fight Prop 87 in the waning weeks of the intense political struggle over this ballot measure.
Aera filed written disclosures of the late contributions. However, it failed to file the disclosures electronically. This meant that the discloures were not available for immediate placement on the state's website for public viewing.
California financial disclosure laws require that late contributions be electronically disclosed with 24 hours of being made. In this case, the donations should have been electronically disclosed by October 28, 2006.
A representative for Aera said the violation was inadvertent. The FPPC said there was no evidence the violation was intentional. The contribution was electronically disclosed by the recipient committee within the mandated time period.[7]
Campaign finance
Donors for the campaign for the measure:[8]
- CALIFORNIANS FOR CLEAN ALTERNATIVE ENERGY: $61,886,129
- Total: $61,886,129
Donors for the campaign against the measure:
- CALIFORNIANS AGAINST HIGHER TAXES-NO ON 87: $94,400,014
- CITIZENS FOR RESPONSIBLE ELECTIONS: $30,000
- Total: $94,430,014
- Overall Total: $156,316,143
External links
- Official Title and Summary, prepared by the Attorney General's office.
- Analysis by the League of Women Voters
- Analysis by California's Legislative Analyst
- Los Angeles Times editorial opposing Prop 87
- Prop 87: What went wrong? An election post-mortem.
- Don't let the big oil money confuse you on Prop 87
- Prop 87 deceptively marketed
- Tom Friedman argues for Prop 87 in the New York Times
References
- ↑ Gay and Lesbian Times, "Calif. initiative campaigns cost $227 million", February 12, 2009
- ↑ Follow the Money, Californians for Clean Alternative Energy
- ↑ Stephen Bing's New Endeavour
- ↑ Follow the Money: Californians Against Higher Taxes; No on 87
- ↑ League of Women Voters ballot measure analysis
- ↑ http://ca.lwv.org/lwvc/edfund/elections/2006nov/id/prop87.html
- ↑ Energy firm to pay $15,000 fine for elections violation
- ↑ Follow the Money, "Donors"
