The Santa Barbara County Taxpayers Association is opposed to AB 1604 by Assemblymember Pedro Nava (D-Santa Barbara) not just because it creates a whole new tax that will cause a larger drag on our economy, which is already struggling to recover.

We also oppose the deliberately misleading tactics being used to promote the oil severance tax. Assemblyman Nava and his supporters like to say that California is the only oil-producing state without a severance tax. This is true on its face, but is misleading.

California taxes oil producers in ways other states do not. For example, we have the highest corporate income tax in the country. Texas, Nevada and others have none. California charges a sales tax on the purchase of the expensive manufacturing equipment used in oil production. Most states do not.

California is already taxing oil producers at a high rate. The addition of the AB 1604 severance tax would give California yet another area where it has the highest taxes of all.

There are other problems. This new severance tax would drive up gas prices, make us more dependent on foreign oil and even increase air pollution and greenhouse gas emissions by forcing us to import more oil.

And – most importantly – as Santa Barbara County Supervisor Joni Gray told us at a news conference yesterday, AB 1604 would cost local residents their jobs and drive down county revenues at the worst possible time.

California needs a diversified energy portfolio, and the tax revenues those energy sources generate, not another tax increase that will weaken our economy.

Assemblyman Nava is not doing his constituents any favors with his tax-raising, job-killing bill. AB 1604 deserves a “NO” vote.