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Lockyer wants to boost tax on oil refiners

By Patrick Hoge Bee Capitol Bureau (Published March 29, 2000)

Attorney General Bill Lockyer Tuesday proposed an "excess profits tax" on California oil refiners as a way to finance a cut in the state's gasoline sales tax.

Lockyer made his pitch during an extraordinary hearing of three Assembly policy committees that was called to collect information on the state's highest-in-the-nation fuel prices.

"It feels like people are being gouged," said Lockyer, who distributed charts showing that average gas prices rose from $1.36 to $1.79 between Jan. 13 and March 20, while crude oil prices only rose from 58 cents to 62 cents per gallon of gas.

Lockyer appointed a task force to investigate the state's oil industry that will hold its final meeting Friday, and he has offered legislative proposals aimed at preventing price-spiking in the state.

Tuesday's hearing came following two weeks of Republicans pointing to the state's record budget surplus and calling loudly for a permanent repeal of all state and local sales taxes on gas.

In addition, outgoing Assembly Speaker Antonio Villaraigosa, who is running for mayor in Los Angeles, has put fellow Democrats in an uncomfortable position by introducing legislation to temporarily suspend the state's 5 percent sales tax on gas during the upcoming summer months.

Lockyer told the joint committee that an "excess profits tax" would help ensure that oil companies pass on any tax cut to consumers, instead of simply raising prices and increasing profits. He estimated that savings to consumers would be about 8 cents to 10 cents per gallon.

Lockyer's proposal came as a shock to oil industry representatives.

"It's a little puzzling and disappointing that he's made this recommendation even though his own gas price task force has yet to have its final meeting or to make recommendations," said Western States Petroleum Association spokesman Jeff Wilson.

"It begs the question: What is the purpose of this task force and all the time and effort that has been spent if he's out independently making a proposal that the task force hasn't even studied?" Wilson said.

Lockyer emphasized Tuesday that he is more interested in long-term solutions to the price-spiking that occurs in California, which he said is the result of six major oil companies controlling the market.

"We have a West Coast oil cartel that we are going to have break up," Lockyer testified, estimating that in 1999 Californians "overpaid" $2 billion for gas compared with what people paid in more competitive gas markets.

Assemblyman Tom McClintock, R-Simi Valley, agreed with Lockyer that the state's oil companies enjoy too much control, but he attributed that to misguided government policies.

McClintock and Assemblyman Tony Strickland, R-Thousand Oaks, used Tuesday's hearing as their latest opportunity to pound the drum for Strickland's bill, AB 1706, that would abolish all state and local sales taxes on gasoline, which average almost 8 percent statewide.

Strickland promised that on Thursday he will attempt for a third time to bring his measure up on the Assembly floor without a committee hearing, a move that Democrats have rejected twice previously as against parliamentary rules.

-- - (, March 29, 2000


Uhhhhhhhh....I predict that gasoline would INCREASE in price at the pump by about 8-10 cents per gal...maybe MORE!!!

-- Uhhhhhh (, March 29, 2000.

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