California, the vanguard of climate policies and environmental justice, prides itself on its leadership and forward thinking. In recent months, our state legislators in Sacramento led by Governor Newsom have rightfully taken a stand against Big Oil by curbing gas-price gouging, signing the most ambitious safe and safety setbacks between oil operations and sensitive receptors, and asserting the people’s interest over corporate profits. However, as we commend these efforts, it is crucial to shed light on the fact that the oil industry continues to benefit from massive tax subsidies and loopholes that must be closed.
Earlier this year, the state’s budget deficit was projected to reach a staggering $22 billion. In response, state legislators proposed a series of funding shifts and cuts, including a reduction of $6 billion in climate spending from the previous year’s $54 billion five-year climate commitment. While the need to balance the budget is undeniable, we must recognize that core programs, including investments vital to achieving our state’s climate goals, should not be subject to the volatility of surplus or deficit years but rather be protected consistently.
Therefore, we call on the Governor to take a bold step forward by initiating a comprehensive review and begin to close some of the current tax loopholes that are specifically benefiting the oil and gas industry.
Some crucial tax benefits are in desperate need of reevaluation. California’s Research and Development Tax Credit enables multinational corporations, including the oil industry, to calculate their California income solely on domestic factors, ignoring their global operations. It currently amounts to a staggering $5 billion in tax breaks. The Accelerated Depreciation of Research and Experimental Costs credit amounts to $90 million and grants the option to immediately deduct or amortize research and experimental costs over a 60-month period. By narrowing the scope of accelerated depreciation, we can redirect these resources towards renewable energy initiatives. The oil and gas industry is also currently eligible for the Manufacturing and Research and Development Equipment Tax Credit, which amounts to around $495 million a year. Redirecting these funds towards renewable energy research, community resilience, protection of frontline communities, and high road job creation will reinforce California’s position as a global leader in climate action.
I urge our esteemed legislators and Governor to prioritize environmental justice and clean energy policies as they make critical budgetary decisions. California has the opportunity to set an example for the nation and the world by closing tax loopholes that perpetuate inequality and hinder our progress towards a new clean energy economy.
Let this be the turning point where we reaffirm our commitment to environmental justice and take decisive action against the undue influence of Big Oil. The choices we make now will shape the trajectory of our state, impacting generations to come. We trust in the wisdom and dedication of our legislators to steer California towards a prosperous and equitable future.
This is the moment to stand together for a more just and sustainable California.
Nayamin Martinez, Executive Director
Central California Environmental Justice Network (CCEJN)
Bio:
Nayamin Martinez is the director of the Central California Environmental Justice Network (CCEJN). Ms. Martinez has been working for 19 years advocating for programs and regulations that protect residents of disadvantaged communities across California’s Central Valley, especially those affected by the oil and gas industry in Kern, Kings and Fresno counties. Ms. Martinez serves in various advisory groups including the “Environmental Justice Advisory Group of the San Joaquin Valley Air Pollution Control District”; the “Community Stakeholders Advisory Committee ” of the UCD Environmental Health Science Core Center. Ms. Martinez holds a Master’s Degree in both Public Health and Sociology.
Nayamin Martinez, MPH
Executive Director
Central California Environmental Justice Network
C. 559-907-2047
