California said no despite backing of stars

Gargi Chakrabarty

Published September 20, 2008 at 12:05 a.m.

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California voters faced a dilemma two years ago similar to an issue on the Colorado ballot this fall.

They had to decide whether to increase tax revenues from oil and natural gas companies flush with billions of dollars of profits.

Supporters of the measure included former President Bill Clinton and Hollywood celebrities Robert Redford and Julia Roberts, among many others. They touted the virtues of Prop. 87, argued that nothing was wrong with taxing the rich energy industry in order to raise money to pay for clean, renewable energy. It would reduce the nation's dependence on imported oil.

Oil and gas companies opposed the measure, claiming it would increase prices at the pump and impose more burdens on average Americans.

At $148.6 million, it was the most expensive proposition campaign in the history of California. Supporters poured in $57 million, but the industry countered with $92 million. Both sides pummeled voters with television and radio ads, fliers and campaign events.

The measure lost by 10 percent of the vote, 55 to 45.

"It was Goliath vs. Goliath," recalled Scott MacDonald, spokesman of the opposition group. "They had President Clinton, Robert Redford and Brad Pitt. But we had the firefighters, and that's an unfair match for the other side.

"We told voters, 'Stop believing the story of the other side and listen to what we have to say - if you are going to tax California oil production, it will reduce oil production, and you'll need to get it from overseas. Prices will go up. So what's the point?' "

Oil and gas companies are using virtually the same arguments today to fight Amendment 58 in Colorado.

They are spending millions of dollars to tell Colorado voters that passing the measure would mean higher pump prices and utility bills for consumers, and lower local tax revenues for counties.

Supporters of the amendment, including Gov. Bill Ritter, say Colorado's measure is not comparable to what was proposed in California.

They say California's proposition would have imposed an additional 6 percent severance tax, while Colorado's proposal only eliminates an existing tax credit, which is, of course, a contention of the current debate.

Also, the California measure received substantial funds from John L. Doerr, Vinod Khosla and William R. Hearst III, partners at the prominent Silicon Valley venture capital firm Kleiner, Perkins, Caufield & Byers. Since the firm is focused on renewable energy, critics said proponents stood to benefit financially if the proposition passed.

But Coloradans should realize that California's vote not to increase taxes didn't stop energy prices from increasing, said David Kenney, who manages the campaign for Amendment 58. In fact, California continues to suffer some of the highest pump prices in the nation.

"We analyzed what happened in California and realized the oil and gas industry framed the debate there," Kenney said. "We are keeping our message simple in Colorado: 'Do we want to give subsidy to an industry which is making billions of dollars of profits?' Average Coloradans don't get a subsidy and Exxon Mobil shouldn't either."

chakrabartyg@RockyMountainNews.com or 303-954-2976

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