At its June 18 Meeting, the Richmond City Council voted to place a measure on the ballot to ask voters if Chevron should pay a tax on its refinery operations.
The Oil Refining Business License Tax Ballot Measure would be an excise tax of $1 per barrel refined within the City of Richmond and would go into the general fund. It could generate between $60 to $90 million per year for 50-years for the city.
During a presentation by Kerry Guerin, Attorney for Communities for a Better Environment Action, who spoke also on behalf of the CBE Action and Asian Pacific Environmental Network Action, she provided information on the proposal.
She explained the proposal was born based off the city needing to balance its budget. During the May 7 Fiscal Year 2024-25 Annual Operating Budget suggests a $34 million gap between budget requests and available revenue—it will also be “impossible” to balance the budget without new revenue.
Guerin highlighted both the benefits of a Richmond Refining Business License Tax which would help the city shore up its fiscal position, help the city save reserves, help seed new industry and mitigate negative impacts of refining.
She also highlighted negative public refining impacts such as the refinery producing 25k pounds of hazardous waste each day, oil spills, groundwater contamination, along with emissions—including premature deaths in Richmond along with Richmond being in the 90th percentile in asthma rate and those near the refinery are in the 97th to 99th percentile for asthma.
She also noted that the 2023 flaring which resulted in 100 air quality complaints to the Air District.
Proposal: To fund general City Services, such as clean air and water treatment, roads, parks, fire and emergency response, toxic land cleanup, and improving community health and youth services, and for general government use, shall the measure establishing a business license tax on the privilege of conducting oil refining in the City of Richmond at the rate of $1.00 per barrel of feedstock refined in the City of Richmond, providing approximately $60 million to $90 million annually for 50 years, be adopted?
Guerin explained the tax proposal is an excise tax, rather than a use tax, sales tax, an inventory tax or an ad valorem tax and is paid by oil refiners, not consumers. She also noted the cost of a barrel of oil is between $70 and $100 and a $1 tax per barrel was “modest”.
She shared at $1 rate per barrel, the City of Richmond could generate between $60 million to $90 million annually.
If adopted, the tax would begin on July 1, 2025 and expire July 1, 2075.
During the meeting, there were more than 70 public comments who spoke about the Chevron Refinery. It included a mixture of those who supported the refinery or wanted the refinery to pay its fair share while addressing health concerns.
Councilmember Soheila Bana called the potential tax not an “exponential threat to Chevron” because Chevron never asked to make a compromise, nor approached the city. She said the council has a responsibility to the community and businesses, unlike Chevron who is responsible to its shareholders—noting they made $35 billion in 2022 (net) and $21 billion in 2023. She also stated the tax would not run Chevron out of Richmond.
Councilmember Melvin Willis expressed his concerns that people were being pit against each other over industry that is only concerned about making their bottom line and that he would support placing the item on the ballot.
“The moment that industry doesn’t see us as a benefit, is the moment we are left hanging,” stated Willis. “I am not okay with that narrative, I think its important for cities to set standards that if you are going to be making money off of our location, if you are going to be making money off the health and safety of others, the things you do… if industry cared about our community, safety would have been prioritized a long time ago and there wouldn’t be so much community advocacy here.”
Councilmember Cesar Zepeda addressed the $34 million budget gap which he says was not a deficit—but rather deferred maintenance due to budget cuts. He said they had $200 million in deferred maintenance for potholes alone. He said lights and infrastructure have a lot of deferred maintenance needs, along with wastewater deferred maintenance needs.
“It’s not a gap, its deferred maintenance needs,” said Zepeda.
Councilmember Doria Robinson shared how previous councils have not made an investment in the people in Richmond who are most vulnerable. She said all people deserved representation.
“I listened a lot tonight,” stated Robinson who recalled the number of accidents and the skies turned different colors. “I know the impact of Chevron is not in my imagination. I also know a lot of people in the world of greed is not in our imaginations and the EPA has deemed Richmond to be Environmental Justice Community primary because of the impact of the refinery.”
She further highlighted the AIR Board has confirmed Chevron is a huge source of pollution in the community. She shared she didn’t like the division and liked living in truth.
“When you make a mess, you have to be responsible for that mess,” said Robinson.
She also addressed the budget where they were dealing with fixing a deficit but they are working towards a “new day in Richmond” where they were running to surpluses instead of deficits.
Councilmember Gayle McLaughlin addressed the comment of where this tax would make Richmond not business friendly.
“That is not going to be the case because people understand about the climate crisis and they know the climate crisis is all about fossil fuels and Chevron is in the business of fossil fuels. Instead, people will see this measure about Richmond standing for the health and well being of our community, the health and well being of our planet. It will also show that this city council and this city is a responsible city and requires big polluters to pay their fair share of taxes,” said McLaughlin. “I believe this measure will show Richmond as a responsible city as a forward looking city, as a cutting edge city and that will attract more businesses. Good clean businesses, the kind we want and need and the kind of jobs we want and need.”
She added Chevron is not going anywhere adding they have a great location on the Bay and has lots of infrastructure. She also said there has not been a new refinery in the United States since the 1970’s. She said Chevron needed to pay its fair share.
Mayor Eduardo Martinez called this a form of legislation to get the funds Richmond needs to run its city. He said this was the people of Richmond saying Chevron needed to pay more so they can provide the services that they need.
Vice Mayor Claudia Jimenez said this tax was the responsible thing to do in terms of how they want more revenue for the city. She said the city needed more revenue and they get that through taxation.
“Do we tax everybody through bond initiatives that people are talking about to tax everyone and everyone pay the same or do we want to be more equitable and ask the rich to pay taxes,” stated Jimenez explaining this was an example of how they are asking corporations who are doing really well to pay more. “So we can have the means so we can fund the services at a quality level that we need.”
She said this was about asking the voters to see if Chevron should pay “their fair share” and support the city and support every resident to get services.
“I think this is the most responsible way to fund city services and let the voters to decide Chevron pays their fair share because they haven’t paid their fair share at all,” stated Jimenez.
The council then voted 7-0 to place the Richmond Refining Business License Tax on the ballot.
- Staff Report – click here
- Presentation – click here
- Watch the Meeting – click here
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