Proposed Tax on Oil Extraction to Fund California Education

by Project Censored
Published: Updated:

How does an added $3 billion to the California education system sound? It sounds nearly impossible, given the state of the current California budget. Currently the state budgets a fraction more than $10 million for education, not nearly enough to ensure that low- and middle-income families are given the best education possible. However, there is a grass-roots initiative in the works that proposes a 15% severance tax on any oil drilled from California land.  Initiative 1481 states that all revenue from this tax be directed towards California education; which could mean more than $3 billion being pumped into the state’s schools annually. Currently, there are no taxes on oil drilled in California, making it one of just eleven states that do not impose a severance tax on oil extraction. A severance tax is a tax on the removal of non-renewable resources.

To corporations profiting from oil extraction, 15% may sound like a hefty tax, however, other large oil producing states such as Alaska and Texas already impose severance taxes. Alaska, for example, taxes its oil removal at 25%. Opponents of this initiative argue that this tax on oil in California may drive away future investors and do more harm in loss of property tax than good. Nevertheless, it’s hard to ignore the potential of added funding to all levels of public education in California, including K-12 schools, community colleges, the California State University system, and the University of California system.

A similar initiative, initiative 1522, would also establish a 15% severance tax on oil extraction in California. It differs from initiative 1481 in that the division of money among K-12 schools, community colleges, the CSU and UC varies. Either initiative could generate desperately needed revenues to bolster public education in California.


Title: “Proposition to tax California oil for education”

Author: Braulio Campos

Publication: California State University, Northridge Sundial

Date of Publication: October 3, 2011



Title: “Initiative 1522 giving back to the schools”

Author: Bernard Miranda

Publication: California State University, Hayward Chabot Spectator

Date of Publication: February 27, 2012



Student Researcher: Alaina Ross, Santa Rosa Junior College

Faculty Evaluator: Susan Rahman, Santa Rosa Junior College