California Fuel Tax Proposal Called Into Question

The proposed measure, which would raise taxes on petrol to fund conservation and alternative energy efforts, is under fire due to benefits it would provide one of its major backers.

1 minute read

August 7, 2006, 2:00 PM PDT

By Irvin Dawid


In November, Californians will decide on the Proposition 87, the Clean Alternative Energy Act, that would impose a 1.5 percent to 6 percent petroleum tax, depending on the per-barrel price of oil, on in-state oil extraction to fund the research, production and promotion of alternative energies. The tax is expected to raise about $400 million a year.

Vinod Khosla, one of the founders of Sun Microsystems and now a prominent Silicon Valley venture capitalist, could profit handsomely if the measure passes. Mr. Khosla put up more than $1 million in seed money for the alternative fuels measure earlier this year. He is also a big investor in ethanol, an alternative to gasoline and one of the energy sources that could benefit if Proposition 87 passes.

"Just because I could benefit from it, doesn't make it wrong," Khosla said. "This is the right thing to do, for a lot of reasons."

Sacramento Bee political columnist Dan Weintraub discusses the relationship between California's intiatives and their backers - exposing a financial relationship that may call them into question, warning that it "is not a good way to make policy".

Thursday, August 3, 2006 in The Sacramento Bee

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