“End Chevron’s Perk” campaign to start next week

"End Chevron's Perk" campaigners will argue that Chevron should pay a 10 percent utility tax like the rest of Richmond residents and businesses do.

The Chevron-taxing Measure T bit the dust in court last month, but another plan to put millions of the corporation’s money into the City of Richmond’s budget is ready to go.

The city could get as much as $15 million more a year if a campaign called “End Chevron’s Perk” persuades voters to end a cap on the Chevron refinery’s utility users’ tax this November.

The campaign, which the Richmond Progressive Alliance is kicking off next week, aims to convince Richmond residents that Chevron should pay the same 10 percent utility tax that every other household and business in the city pays.

The additional city funds could go toward a variety of things the city is struggling to pay for right now such as city employees, public programs and the high-performing Coronado School the city funded to keep open, said city councilman Jeff Ritterman.

Unlike the Measure T tax measure that a judge ruled violated state law last month, this ballot measure would simply write the corporate tax break out of city law. For years, Chevron was the only Richmond utility user that could pay a flat utility tax fee of at least one million dollars “for each percentage of tax imposed for any utility tax year” instead of the full percentage tax rate. Right now the flat tax fee is $1.4 million for each percentage of tax.

The Richmond City Council approved the utility tax cap back in 1983.

In response to protests against the corporate tax break, Chevron agreed in 2006 to pay a 10 percent tax instead without disclosing any utility user records.

But after an early 2009 city audit found that Chevron – the second-most profitable US corporation in 2008 – had underpaid its utility taxes to the City of Richmond since 2006, the city council showed it was inclined to change the refinery’s utility tax responsibilities.

On May 5, all city council members, except an absent Tom Butt, voted to put the tax equalization measure on the November 2010 ballot.

As part of the previous $28 million settlement in the tax audit case with Chevron, however, the measure could not be enacted until 2013, according to Ritterman.

“Obviously, that’s not the way we wanted it, but we thought the settlement money was advantageous enough,” Ritterman said.

Chevron has not put out a formal statement about the campaign yet. In the past, Chevron representatives have said the City of Richmond has a history of putting much larger tax burdens on them than other cities with refineries.

“‘The government makes more money on the Richmond refinery than Chevron does,”’ said Mike Wirth, a Chevron executive vice president, told the New York Times last year.

Chevron’s Richmond refinery pays double the amount of local taxes, licenses and fees that each of its two other U.S. refineries in El Segundo, Calif. and Pascagoula, Miss. pays, according to Brent Tippen, a Chevron Richmond refinery spokesperson.

“Refining is a highly competitive business,” Tippen said. “In Richmond and Contra Costa County, we face challenges that put our company at a competitive disadvantage compared to other Bay Area and California refiners, both from a tax and environmental standpoint.”

Ritterman did not deny this charge.

“I say to those other cities, ‘Up your tax rates,'” Ritterman said. “All cities are fighting for their survival right now and, as a society, we need to take some of that profit. It shouldn’t all be for going into private business and the wealthy.”

George McRae, 56, who lives on the border of Richmond and El Cerrito, said he supports any measure in which Chevron gives more money to the City of Richmond. McRae likened Chevron to the penny-pinching Exxon Corporation, which fought a $5 billion fine down to a less than $400 million fine after the Exxon-Valdez oil spill off the coast of Alaska.

“It’s a matter of principle and good faith that they could so easily let them, let Richmond, have the money it needs to solve so many of its problems,” McRae said. “Richmond is trying to do things like open Indian gaming casinos and they already have one of the highest sale taxes in the state (9.75%).

“It’s suffering and it’s just ridiculous for [Chevron] to be holding on to this money. They could solve Richmond’s problems with just pocket change – they really could – and it’s outrageous that they don’t do that.”

The “End Chevron’s Perk” campaign will have its first meeting on Wednesday, Jan. 13, 2010 from 7 to 9 p.m. at 402 Harbor Way in Richmond. The meeting will be a place for those interested in the measure to educate themselves and start thinking about endorsing it.

3 Comments

  1. Ormond Otvos

    It’s quite possible that this old, old Chevron refinery will shut down, due to dwindling automobile us (down 4% year over year). See http://www.theoildrum.com/node/6016 a very good source.

    “It is not too surprising that refiners are shuttering refineries in the Northeast. These are likely among the oldest refineries, and oil consumption in the East has been dropping for several years, as can be seen on the graph above. Profit margins have also been low.”

    Chevron will make its decision as cold-bloodedly as it always has. It’s a legal “corporate person” but it isn’t human and hasn’t evolved any moral sense, doesn’t believe in God, or you.

    Chevron’s goal is to make money for its investors, and you’re likely NOT an investor. People with that kind of money don’t live in Richmond. POINT Richmond, maybe. East Richmond, maybe. But not the polluted center and west and north Richmond.

    You’re right in expressing yourselves as angry with the pollution. Voting is the only power you have, and if it looks like your votes might work, Chevron, through its elected and commercial puppets, will flood Richmond with glossy pamphlets extolling all the teeny tiny good works they pretend to do.

    They will spend hundreds of thousands of dollars to maintain their freedom to pollute and profit. Talk to your friends. Richmond can handle the loss of Chevron. We’re still a beautiful location on SF Bay, with public transit, great views and weather, proximity to Marin, the ocean, and the Sierras.

    As you watch the crazy weather, remember our weather tends to the middle. Dump Chevron by putting pressure on them. There will be lots of jobs taking it apart and cleaning it up, all of which Chevron will have to pay for.

  2. Tony Suggs

    Yea,

    Let it close down. The largest private employer in the city. The largest revenue source for the city.

    The great views, transit and weather has brought so many businesses to Richmond. Thats why there are plenty of vacant commercial buildings and store fronts in the mall.

    BTW, what has God have to do with running a business?

  3. Patranus

    Continue to push Chevron out of the city and instead of getting extra funds for the city, the city will be left with no funds at all.

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