For more information: http://longbeach.gov/cityclerk/elections/barrel-tax/
The information on this fact sheet is for informational purposes only to describe the practical effects of Measure US. This information sheet does not advocate a yes or no vote on the measure.
What is this ballot measure about?
- The City taxes oil producers for every barrel of oil produced in Long Beach. The City receives 48 cents for every barrel of oil produced in Long Beach, 33 cents for special purposes - Public Safety (through Measure H adopted in 2007) and 15 cents for general purposes through the existing Oil Barrel Production Tax (Barrel Tax). Measure US, if approved by voters, would increase the general purpose Barrel Tax from 15 cents to 30 cents per barrel and apply a CPI to the entire general purpose tax.
How much funding does the Barrel Tax provide?
- The Barrel Tax, which is paid by oil producers and mineral interest owners, currently provides $1.6 million annually in General Fund revenue to the City. The ballot measure, if approved, would increase the Barrel Tax to 30 cents per barrel, with annual CPI adjustments, resulting in an estimated additional $1.6 million in General Fund revenue in the first year to fund City services. Funds are expected to decline in future years by about 8 to 10 percent a year as oil production normally declines each year.
What exactly does Measure US tax?
- Measure US taxes oil production. Only those who have mineral rights and/or produce oil in Long Beach would pay this tax. Long Beach residents who do not own mineral rights will not pay this tax.
When would Measure US become effective?
- Measure US, if approved, would not go into effect until October 1, 2021. The specific uses of Measure US funds would be approved as part of the FY 22 Budget process (budget year beginning October 1, 2021) by the City Council.
If approved, how could Measure US funds be spent?
- Measure US is a general tax and would provide funds for general City services. The City Council, on September 15, 2020, adopted a Resolution expressing its intent to prioritize spending of Measure US funds for the following purposes:
- Climate Change and the Environment: May provide funding to reduce greenhouse gas emissions; educate and inform the public of the consequences of climate change; implement the City’s Climate Action and Adaptation Plan or other environmental strategic plans; promote air and water quality; and, other climate and environmental programs as determined by the City Council through the annual budget process.
- Community Health: May provide funding for community health and well-being programs and services; trauma-based approaches to community needs; violence prevention services; address health equity and health disparities in at-risk populations; implement health-focused strategic plans; and, other health-focused initiatives as determined by the City Council through the annual budget process.
- Children and Youth Services and Programs. May provide funding to create and expand early childhood education; youth programming and youth equity opportunities; implement youth-focused strategic plans; youth job training opportunities; and, other child and youth-focused initiatives as determined by the City Council through the annual budget process.
- Pursuant to voter-approved Measure B, 1 percent of the tax collected will be deposited into a special Rainy Day fund to help balance future General Fund shortfalls.
How long would the increased tax be in effect?
- The increased Barrel Tax would be in effect until repealed by Long Beach voters.
How does the increased tax rate compare to rates in other cities?
- There is a wide range in the tax rates other regional cities charge for oil production, and a variety of indices are employed in the application of the tax. Below is a table showing the various total rates.
How was this placed on the ballot?
- The City Council voted on July 29, 2020 with an 8-0 vote to place the measure on the November ballot.
Who decides whether this measure is approved or not?
- Under State law, local taxes such as Measure US require majority voter approval. Therefore, Long Beach voters will make the ultimate decision whether to approve or reject the measure.
What happens if Measure US is approved?
- If approved, the City’s General Fund would receive an additional $1.6 million. As part of the budgeting process, the City Manager would make a proposal to the City Council to spend the new revenue, consistent with the spending priorities resolution approved by the City Council. That proposal would be presented to the Mayor and City Council in August 2021, with ultimate budget decisions being made by the City Council by September 15, 2021, to begin spending October 1, 2021.
What happens if Measure US is not approved?
- If Measure US is not approved, the City’s General Fund would not receive an additional $1.6 million to spend on the priority areas identified by the City Council.
What will happen next with the proposed tax?
- Voters will decide on November 3, 2020 whether to approve or reject the increase in the Barrel Tax. Any new funds generated by the rate increase will be reviewed by the Mayor and City Council each year and utilized through the annual budget process with community participation.
I have questions about information I received from a campaign. Who can I talk to about that?
- City staff are unable to answer questions about any campaign. The City can only provide neutral information and facts about the measure, such as this fact sheet. For questions regarding a particular campaign, please contact the individual campaigns for or against the measure.
Where can I view the ballot measure and accompanying Ordinances for Measure US?
- All information on the specific wording of Measure US, impartial legal analysis and other documents can be found at www.longbeach.gov/cityclerk.