|Lubrication by Big Oil Ends
Richmond City Council Inquiry into Utility Tax Inequity
May 15, 2002
Faced with multi-million dollar deficits in
the coming fiscal year, some members of the Richmond City Council
expressed renewed interest in reexamining a special provision of the
Utility User’s Tax created for Chevron in the 1980’s. All Richmond
taxpayers, except one, are required to pay 8% of their utility bills.
The one exception is Chevron (now Chevron-Texaco, a $100 billion
company). Under the current ordinance, Chevron can decide annually
whether to calculate their tax as an arbitrary lump sum (the “cap” ) or
to pay the same 8% assessed to every other Richmond taxpayer. Chevron
has always chosen the “cap,” maintaining that it has been more costly to
them but has allowed them to preserve the secrecy of how much energy
they use – a “trade secret,” they say. In fact, any information about
any taxpayer’s utility usage is confidential, making Chevron’s excuse
ring hollow. For the full text of the ordinance, see http://bpc.iserver.net/codes/richmond/index.htm.
For the last several weeks, an initiative has been floating around the City Council to hire an expert consultant to determine if Chevron would pay more or less tax under the “cap” provision compared to the percentage calculation. The idea was that if Chevron would pay more under the percentage calculation method, the City Council may want to consider a ballot measure to eliminate or raise the cap, effectively enhancing the City’s revenue without affecting any taxpayer except Chevron.
On a 5-1-3 vote, the City Council last night agreed not to pursue the inquiry. Some of the reasons given were as follows, with my rebuttal in caps:
1. We already received information from Chevron that they were paying more under the cap than they would have paid under the percentage calculation. That should satisfy us. We believe them.
IT IS TRUE THAT CHEVRON HAS PRODUCED FIGURES INDICATING THAT THEY VOLUNTARILY PAID MILLIONS MORE UNDER THE “CAP” THAN THEY WOULD HAVE HAD TO PAY UNDER THE PERCENTAGE CALCULATION. THE QUESTION IS WHETHER THE CITY SHOULD RELY ON THE CHEVRON-PROVIDED FIGURES WITHOUT EXPERT THIRD-PARTY VERIFICATION.