The kindest cuts

Fearing the impact of California’s energy crisis on the state’s fiscal and environmental health, a coalition of taxpayer and environmental groups last week urged Governor Gray Davis to take a pair of green scissors to this year’s budget.

The coalition’s “Green Watchdog” report recommends slashing 14 environmentally harmful programs as a way to cut pollution and to save some $23 billion at a time when the state faces enormous costs for ongoing electricity purchases.

The coalition includes an unusual alliance of taxpayer and environmental groups, including the California Tax Reform Association, the Congress of California Seniors and the California Public Interest Research Group (CALPIRG). They say the loss of half of the state’s budget surplus—more than $5 billion so far—will inevitably threaten existing programs and services. Where better to start cutting, they say, than those giveaways to corporate polluters and other environmentally damaging programs.

Among the recommendations is the elimination of tax breaks for oil and gas companies, as well as the imposition of a “severance tax” on oil drilling in the state, or charging for the removal of that public resource.

Other large oil-producing states like Alaska and Texas collect millions of dollars in taxes on oil drilling, and California could collect up to $1.5 billion in royalties on oil pumped in the state.

Also suggested for the chopping block are “loopholes” in property tax law—enshrined in the 1978 tax-revolt measure Prop. 13—that encourage land speculation and prohibit local governments from collecting taxes on land that is rapidly increasing in value, which is typical in fast growth areas with high pressure to develop.

“Our current tax system sends all the wrong signals in regards to development. It encourages land speculation and sprawl,” said Lenny Goldberg with the California Tax Reform Association.

Requiring periodic tax assessments on such property, said Goldberg, would curb sprawl and net the state at least $20 billion over the next five years.

The entire report can be viewed at