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Oil & Gas Tax Prop Clears Hurdle for 2014 Ballot

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Oil derricks in L.A. County. | Photo: Storm Crypt/Flickr/Creative Commons License

Backers of an initiative to impose a 9.5 percent tax on oil and natural gas extracted in California, primarily to increase funding for education, received permission last week from Secretary of State Debra Bowen to begin gathering signatures.

During its first 10 years, 60 percent of the revenues generated by what is dubbed as the California Modernization and Economic Development Act would be allocated to education -- split equally between kindergarten through 12th grade and higher education.

Another 22 percent would go to clean energy projects and research, 15 percent to counties for infrastructure and public health and safety services, and 3 percent to state parks.

Following the first 10 years, 80 percent would go to education, 15 percent to counties for infrastructure and public health and safety services, and 5 percent to state parks.

The initiative would prohibit passing the tax on to consumers through higher fuel prices.

If approved by voters, the initiative would initially increase state revenues from $1.5 billion to $2 billion per year, according to an estimate prepared by the Legislative Analyst's Office and Director of Finance Ana J. Matosantos.

Valid signatures from 504,760 registered voters -- 5 percent of the total votes cast for governor in the 2010 general election -- must be submitted by Sept. 23 to qualify the measure for the November 2014 ballot.

A similar measure, Proposition 87, was rejected by voters in November 2006 by a margin of 54.6 percent-45.4 percent.

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