|Chevron Defenders Strike Back
December 16, 2007
Two Guest Commentaries in the Contra Costa Times caught my attention this week. They were in response to Jerry Powers’ December 1 op ed piece and the Contra Costa Times editorial of December 6 (Ed and Op Ed on Chevron Tax Appeal, December 8, 2007). The first was from Kris Hunt of the Contra Costa Taxpayers Association, who apparently has no problem with Contra Costa taxpayers making up whatever Chevron might be able to take away. It’s a good thing the Contra Costa Taxpayers Association is looking out for us poor taxpayers. The second is from Dean O’Hair, external affairs manager at Chevron Richmond Refinery, who wants to make sure Chevron is treated fairly and equitably and complains that the “…county refuses to provide the refinery with the public roll value information, forcing the refinery to submit a Public Records Act to obtain the information.”
O’Hair should know all about withholding records. Chevron has paid its utility users tax to the City of Richmond the last two years without providing the City any records of how that tax was computed. It’s like you and me sending the IRS a check each year without a tax return. If we did that, we’d probably be in jail.
I like that part about “fiduciary responsibility to its shareholders.” That translates into “a responsibility to use every possible stratagem and break every possible law to avoid paying taxes that are owed to public agencies.”
Clearly, Chevron is being picked on, and its assets are being overvalued by the greedy county assessor. That’s why Chevron’s stock has continued to rise inexorably. In fact, during the last year, Chevron stock went from 73.53 to 92.02 (http://moneycentral.msn.com/investor/charts/chartdl.aspx?symbol=CVX&CP=0&PT=10), clear evidence that the company is in trouble and its assets, like sub-prime loans, are plummeting in value.
Tax law applies not emotions
By Kris Hunt
Article Launched: 12/15/2007 03:01:53 AM PST
Jerry Power's Dec. 1 commentary on Chevron's Richmond refinery confused so many tax issues it is difficult to know where to start. Essentially, Power argued that because local governments need the money, Chevron should pay the property tax assessed by the county even though Chevron's legal advisers and appraisers believe the refinery is being overtaxed and treated unfairly under tax law.
That Chevron is making money seals the deal as far as Power is concerned. From a taxpayer's perspective, the arguments Power set forth are wrong for many reasons, but I will briefly touch on three.
First, every taxpayer who believes their property assessment is incorrect has the right to appeal. Because Chevron has a fiduciary responsibility to its shareholders, it has an actual obligation to appeal what its advisers believe is an unjust assessment.
Second, property taxes must be based on tax law, not on an emotional argument that a city or county "needs" revenue. I would hate to see us return to the pre-Proposition 13 days when property taxes could be raised annually without limits. Not only did that tax method discourage cost effective government, but everyone (particularly the poor and elderly) lived in fear of large tax increases.
Third, property taxes should not be related to a corporation's worldwide income, but to the value of its specific property as determined by tax law. A logical extension of Power's argument would be to tell local Starbucks and Costco stores that their property tax is based on income reported by parent corporations.
Another logical extension of Power's argument would be to tell the 22,000 Contra Costa residents who recently had their property reassessed downward to continue to pay their former, higher property taxes because the county, Richmond, etc. need their tax dollars.
Hunt is executive director of the Contra Costa Taxpayers Association.
Times wrong about refinery
By Dean O'Hair
Article Launched: 12/15/2007 03:01:56 AM PST
Unfortunately, your editorial "Oil refinery for sale?" contained erroneous information, and we want to correct two important facts regarding Chevron's appeal of property assessments of the Richmond refinery.
The editorial says the property assessment is what the refinery would sell for, which is not entirely correct.
What the refinery may sell for includes both intangible assets, such as a highly trained workforce, and tangible assets such as the land and equipment. The property assessment is essentially "what a buyer would pay" less the value of the nontaxable, intangible assets.
Additionally, the editorial states that the current property assessments are based on the Proposition 13 calculation. Not true. In fact, to our knowledge the county has never enrolled a Prop. 13 base year value for construction activity at the refinery.
This means that the assessments have never been made and may be the reason the county refuses to provide the refinery with the public roll value information, forcing the refinery to submit a Public Records Act to obtain the information.
Chevron recognizes its responsibility to pay its fair-share of taxes to support needed public services and the local school district. However, Chevron, like any other taxpayer, has the same right to make sure we are treated fairly and equitably in the process.
O'Hair is external affairs manager at Chevron Richmond Refinery.