Assembly Democrats will bring a bill to the floor tomorrow aimed at implementing a tax on oil companies that will surely push gas prices in California over the $4.00/gallon mark.  In a weak attempt to play the role of "good cop," they want to dedicate the revenue from this tax increase to K-14 education.  Seems reasonable -- except when you consider the fact that school enrollment is declining while school spending continues to increase.  Fewer students, more money.  I can't wait to hear them explain this budgetary phenomenon.

We have a massive deficit in California.  We spend more than we take in.  It's not a particularly difficult concept to understand.  What is difficult to understand is how the Democrats plan to fix the deficit by dedicating funds to increased spending.  At a time when everyone should be willing to tighten their belts, Fabian Nunez and his cronies in Sacramento would prefer to buy a new belt -- Louis Vitton, presumably.

It seems to me (and probably to most rational people) that if there was ever a time to discuss a slight reduction in school spending, now would be the time.  Of course, the Democrats won't even entertain the idea of having the discussion...let alone the idea of actually making a spending reduction.  They want to balance the budget with 50% new taxes and 50% spending reductions, yet they've been reluctant to actually suggest any spending reductions, while they present new tax increases on an almost daily basis.

I suppose, however, if they're going to propose a massive tax increase, oil companies certainly make an attractive target.  After all, they're setting revenue records quarter after quarter.  Why not stick them with another tax?  They're already paying the income tax, the regulatory fee, the personal property tax, the real property tax, and sales tax on the equipment they use in oil production.  Hell, they probably wouldn't notice another few dollars tacked on to every barrel.

Unfortunately, however, you will notice the extra production costs.  Despite Democrats' claims to the contrary, these taxes will be passed on to the consumer.  The Legislative Analyst's Office has said many times that these clauses are difficult for the BOE to enforce because there's no clear way to determine what is an increase to cover new taxes and what is an increase in production costs.  The price of gas will go up -- considerably -- don't be fooled by their rhetoric.

Some companies may take the high road and choose not to pass the costs on to the consumer.  Sadly, that high road also leads right out of California.  Higher production costs mean lower production levels, which leads to an increased dependence on oil coming in from out of state.  Importing and refining oil from out of state is more costly than doing it all in-state, and these costs can legally be passed on to the consumer.

Finally, this proposal flies in the face of the will of the people.  We have already rejected an oil severance tax -- twice, in fact -- as recently as 2006.  The lame-duck Speaker's suggestion that the legislature step in and blatantly contradict the will of the people is exactly the kind of arrogance and overreaching that has gotten him in political hot water, and may have been the undoing of Prop 93.

I have faith that our San Diego Republicans will stand strong with their colleagues in Sacramento tomorrow, and this tax will fail.  Perhaps then we can start to have a real discussion about how to fix our deficit, rather than gimmicks and games that only lead us further into recession.