As we first reported late Wednesday, tax reform commission Chairman Gerald Parsky sucker-punched at least some members of his panel by sending them an unexpected, last-minute recommendation to generate “tens of billions of dollars” of new revenue by vastly expanding offshore oil drilling in state waters.
Also in the last-minute materials was the final proposal for a nearly-flat (two-tier) personal income tax that would give a massive tax cut to the richest California taxpayers and a teensy-weensy slice to the poorest taxpayers. Coupled with the knuckle-dragging business net receipts tax, the Parsky proposals are about as regressive as musclebound Gov. Schwarzblunder and his diminutive, cigar-sucking sidekick Susan Kennedy could ask for.
But at least commissioners and the public knew that was coming. The revival of Schwarzenegger’s proposal (which we understand was the brainchild of his economics guru David Crane) to gain approval of the twice-defeated Tranquillon Ridge offshore oil project as a tax-revenue scheme — now that was a nasty surprise.
“There are several economic reasons for permitting new oil leases,” reads the oil-drilling recommendation, to be considered by the commission today, when it meets to craft a final proposal to send to the governor and Legislature. “Unlike all other revenue sources, the oil companies, which would make these new royalty payments, have requested the ability to do so. Revenues from this source would create no economic distortions, and the economic activity being taxes could not migrate elsewhere.”
The recommendation came as a shock, not only because the offshore issue was only casually discussed during the commission’s months of hearings, but also because it deepened the atmosphere of secrecy and sleight-of-hand in which Parsky assembled the agenda for the panel’s final, crucial meeting. As a political matter, such an expansion of offshore drilling would also directly conflict with decades of state policy, in which environmental protection of coastal waters and beaches have trumped economic issues, resulting in a long-held moratorium on new leases.
The proposal for more offshore drilling seems to have worked its way onto the commission’s plate at least in part at the request of conservative Hoover Institution economist Michael Boskin, who also sits on the board of Exxon Mobil.
The commission’s analysis cites a State Lands Commission study estimating that there are 1.635 billion barrels of “recoverable oil on state lands that are not currently under lease.” The U.S. Minerals Management Services, which controls leasing and drilling on federal lands beyond three miles from shore, projects an additional 10.1 billion barrels that remain “undiscovered but is technically recoverable.”
Current royalties paid by oil companies on a small number of existing, small state leases vary from 16.7 percent to 55 percent of the revenues they generate, which altogether yield about $400 million for the state.
“If the ban (on new leases) were lifted,” the recommendation says, “it could make available the 1.63 billion barrels (and) California would receive a share of revenue from new leases on federal lands off of the state’s coast.”
“Over time, the state could receive as much as $34 billion in royalty revenues from new leases in California waters, assuming oil trades on average $70 per barrel and the average royalty rate is 30 percent.”
The recommendation, sure to draw the ire of environmentalists and coastal legislators, pointedly does not suggest imposing a new severance tax on oil companies. California is the only oil-producing state that does not have such a tax, which is being pushed in the legislature by several members of the Assembly, including Assemblymen Pedro Nava, D-Santa Barbara, and Alberto Torrico, D-Fremont.
BTW: There’s no frigging way the agenda and agenda packet was ready early enough for the public to have legal notice. Not that Parsky seems to give a rat’s butt.
Eternal Filthiness of the Adulterous Mind: To be honest, Calbuzz had never heard of (now) ex-Assemblyman Mike Duvall, a Republican from Yorba Linda, until Wednesday morning. But after this and this , and his resignation a few hours later, it’s hard to imagine there’s anyone left on the planet who hasn’t heard of him now. Seriously, you just know that in, oh say, Guinea Bissau or the Republic of Nauru or on Chuuk Island, guys were walking up to their friends all day and saying, “Mike Duvall,” and then both of them would fall down in the street and laugh uncontrollably.
We’ll leave it to others to draw the great moral lessons implicit in the NFW tale of a dumbass holy roller, family values, fat lying tub of goo who brags over an open mike about cheating with kinky sex, not only on his wife but also on his mistress, in favor of noting that no matter what he does or where he goes the rest of his life, Mike Duvall will be a walking double entendre:
Take for example, this lede on a recent Capitol Weekly piece about him:
“If you want to know what issues are important to Assemblyman Mike Duvall, R-Brea, just look at what he did the other weekend.”
Or this from his soon-to-be shut down web site:
“In February 2009 Assemblyman Duvall was named “Legislator of the Year for 2008″ by the California Attractions and Parks Association for his opposition to Governor Schwarzenegger’s proposed ‘fun tax.’”
You also gotta wonder whether Chapman University wants its plaque back:
“Chapman University awarded Duvall the Ethics in America Award in 2000 for his ‘demonstration of the highest standards of ethical integrity.’”
And finally this: The hearing room where Duvall let his potty mouth run wild is festooned with a large color portrait of the late, great Jesse Unruh, a man of great appetites who famously said of lobbyists, “If you can’t take their money, drink their liquor, fuck their women, and then come in here the next day and vote against them, you don’t belong here.”
Of course, that was in the days before women were lobbyists.
PS: Get this, from Duvall’s web site: “I want to make it clear that my decision to resign is in no way an admission that I had an affair or affairs. My offense was engaging in inappropriate story-telling and I regret my language and choice of words. The resulting media coverage was proving to be an unneeded distraction to my colleagues and I resigned in the hope that my decision would allow them to return to the business of the state.”
Got it.
[3:45 pm update] Whoa there! We just got sent a document titled “Revenues From Development of California Oil Reserves” which is not on the agenda, is not in the proposed tax package and is not on the commission’s web site. It doesn’t say who it came from although it is likely the result of a request by commissioner Michael Boskin of Hoover Institution and — note this — a member of the board of Exxon Mobil (psst was this disclosed?).
Margin of error: The oil company based in Houston that is trying to win a lease for drilling in state waters off the coast of Santa Barbara is e-blasting an alleged summary of poll results about the controversial project, providing a case study of how scientific public opinion surveys can be manipulated for political purposes.
ers favor their proposed Tranquillon Ridge project. The sheet consists of a series of bullet points, all of them purporting to show statewide support for the project among some genus or species of Californian.
who’s led the legislative fight to defeat the project last month.
Steve (doesn’t) Heart eMeg: Insurance Commissioner Steve Poizner, whose team rolls out an average of 316 press releases a day bashing GOP guv rival Meg Whitman, may finally have gained some traction with one of his attacks. It’s a You Tube spoof of the “Love Boat” which skewers Her Megness for some gushy comments she made about Van Jones, the former Oakland lefty who’s become Obama’s green jobs adviser – and is now in the free-fire zone over at Fox News.
Now Brown is taking aim at the mother lode of populist outrage, launching an investigation of Health Management Organizations, in which he promises to probe how HMOs “review and pay insurance claims submitted by doctors, hospitals and other medical providers” amid reports that the state’s top five insurance provides are denying nearly 40 percent of claims.
r Flashreporter Jon Fleischman, sponsor of the plan…
Memo to Methuselah: Jerry Brown airily dismisses Gavin Newsom’s bid to make a generational contest of the Democratic primary, but maybe that’s because Crusty the General hasn’t looked in the mirror lately.
After a full-body scan, in-depth analysis that lasted until a few minutes before lunch, our highly-trained and highly paid technicians reached consensus that Brown needs some work on those geezer eyebrows, which make him look like a cross between Jed Clampett and the prophet Isaiah.
