Taxing L.A.'s Black Gold Could Make the City Millions

It's often hidden from our eyes, but the Los Angeles area is the third largest oil field in the country. You can find hidden oil rigs at The Farmers Market, the Beverly Center and other well known spots. And for such a lucrative business, no taxes are levied upon them, despite years of budget belt tightening across the state.

California's is "the only one of the 22 major oil states not to charge an oil extraction fee," explains L.A. City Councilmember Janice Hahn in a recently submitted motion that seeks to tax drillers within city limits. "In Los Angeles county, it has been reported that over 27 million barrels of oil are extracted every year. Fees per barrel range from a low of 20 cents in Huntington Beach to a high of 60 cents in Signal Hill. The City could potentially raise millions of dollars by implementing its own levy on oil extraction."

It's been an issue brought up in the past, including when Paul Koretz last Monday ranted about L.A.'s "stupid budgeting," saying the city should tax billboards and oil. Statewide initiatives in the past have failed, but Hahn wants to see something put to Los Angeles voters by at least Spring 2011. "It wouldn't be a hard sell," Koretz said.