Organizations representing African American businesses in the Greater Los Angeles area were in the forefront of the recent successful campaign against Measure O on the March ballot in the city of Los Angeles.

The prominence of the Black Business Association, headquartered in Los Angeles, the International African and African American Chamber of Commerce, and the Regional Black Chamber of Commerce of the San Fernando Valley was noted with a hint of surprise by some as the campaign began.

It shouldn’t have come as a surprise.

Measure O would have instituted a new $1.44 per barrel tax on oil production in Los Angeles that would have brought more job losses, damage to our local economy and reduced revenues for schools and county services.

Black-owned businesses—many already struggling to survive in this recession—were especially vulnerable to a new tax that would have taken $4 million out of the economy each year. Such a tax doesn’t just hit those working in the oil fields. Businesses from the dry cleaners to your favorite local restaurant would all feel the pinch as spending was reduced because of a new tax.

With unemployment in Los Angeles at a record 14 percent, more job losses are the last thing any neighborhood economy needs now.

Voters understand this. On March 8, they defeated not only Measure O in Los Angeles, but also a 500 percent increase in a Beverly Hills oil tax that was on that city’s ballot.

In 2006, more than $60 million was spent supporting a statewide oil severance tax in Measure 87. Voters rejected that one by a 10-point margin.

But some don’t get the message. There are proposals again making the rounds for another ballot measure to create an oil severance tax—AB1326.

An economic study on a theoretical 12.5 percent oil extraction tax found that the reduction it would force in oil production would cost thousands of jobs, require importing more foreign oil, and put upward pressure on gasoline prices.

Because the value of oil underground is taxed through property taxes, anything that lessens that value—as a new severance tax would do—means millions of dollars lost to schools and local governments at a time, when many are facing great budget difficulties.

Along with property taxes and corporate income taxes that are among the highest in the nation, the state levies other taxes on oil production that other states do not.

We also pay the highest gasoline and diesel taxes which contribute to some of the highest fuel prices in the country.

A new oil severance tax–bringing more lost jobs, higher gas prices and lost tax revenue–isn’t the answer to anything.

By election day, March 8, the coalition against Measure O had grown considerably from those early days. Parents of Watts, California Small Business Alliance, United Steelworkers, the Small Business Action Committee, Los Angeles Area Chamber of Commerce and many others understood the potential harm, and joined in the effort to defeat Measure O.

With Measure O, or a new state-wide proposal that threatens more job losses and more hurdles for economic recovery, organizations representing African American businesses and entrepreneurs understand the importance of being in the forefront of the effort to defeat a tax that would hurt the hard working men and women we represent. No surprise there.

Earl “Skip” Cooper II is president and CEO of the Black Business Association, headquartered in Los Angeles.

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