A potential November 2022 ballot measure that would raise the taxes on oil producers for every barrel produced in Long Beach could also test the power that California lawmakers have over local measures.
The measure, which proponents have not begun collecting signatures for, would add $3 to the city’s general oil barrel production tax, a move that could generate $20 million or more annually for the city’s general fund.
The measure, titled the Long Beach Environmental Protection General Purpose Oil Production Tax Increase Measure, was submitted to the City Clerk’s office last week by Elliot Lewis, an owner of multiple cannabis dispensaries in and around Long Beach.
Lewis said that the oil industry should pay more, given the harm that its product causes to the environment and the people living in the city.
“They need to pay more taxes,” Lewis said Tuesday.
The petition submitted to the clerk cited the October 2021 oil spill that dumped 25,000 gallons of oil in the Pacific Ocean from a pipeline situated off the Long Beach coast, saying that the current taxes paid by oil producers don’t go far enough to ensure that the city has sufficient revenue to offset future spills.
Because it’s a general tax, the measure would only need more than 50% of voter approval to win if it qualifies for the ballot. As a general tax, the revenue it generates cannot legally be set aside for specific programs, but it could boost the city’s overall budget, which is currently facing a $30 million shortfall in 2022.
But first, proponents will have to collect about 28,000 signatures to get it on the ballot, according to the City Clerk’s office.
Ballot measures need 10% of registered voters’ signatures to qualify for a vote. A definite number of how many signatures this measure would need was not available this week because the city is still waiting to hear from Los Angeles County election officials about how many registered voters are in Long Beach.
In March 2021, Long Beach had 281,731 registered voters. The City Clerk’s office said proponents would have until July to get the required number of signatures verified.
But placing the item on the ballot could be a lesser obstacle than what could happen if voters approve it.
Voters approved Measure US, a similar oil production tax that was placed on the ballot by the City Council in 2020, which was aimed at providing funding for youth programs and issues caused by climate change. The 15 cent increase was projected to create $1.6 million in annual revenue, then gradually decline as oil production comes to an end in the city.
The most recent city budget projected about $1.33 million would be generated by Measure US. The initiative being pursued in 2022 is 20 times larger than Measure US but could run into a legal obstacle created by the California Legislature earlier this year.
Assembly Bill 155 specifically banned new taxes levied against oil production in Long Beach that would affect the state’s share of oil revenue. Deputy City Attorney Rich Anthony said this raises questions that his office hasn’t yet answered.
“The California constitution lays out how ballot initiates work in charter cities, as does our charter,” Anthony said. “It’s unclear if state legislation takes precedent over those two.”
Anthony said it could be the case that if the measure makes it to the ballot and wins that the state could sue the city to block just its share of oil revenue from being taxed at a higher rate.
Not all of Long Beach oil is produced on state land, like the Tidelands Area, but the oil production on other properties is not the lion’s share of oil production in the city, Anthony said.
Anthony added that it is common for state laws to single out cities for specific things like AB 155 did with Long Beach oil production. But the office doesn’t yet know if state law has the legal authority to stop a local ballot measure.
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https://staging-live.lbpost.com/news/heres-how-long-beachs-proposed-oil-tax-will-work-if-voters-approve-it