Struggle over corporate taxes in the town Chevron built
-
An old brick building on Richmond Street flying an American flag has a view of the Chevron El Segundo Refinery from the historic downtown of El Segundo, which is in its 101st year. After decades of mostly prosperous times for the city and the oil company, El Segundo is having a falling-out with its longtime benefactor.
Share with others:
LOS ANGELES -- Doug Willmore wasn't on the job long as city manager in El Segundo, Calif., before discovering just how deep the town's loyalty runs to the oil giant that put it on the map.
After the city began discussing a big tax increase for the Chevron oil refinery a few months ago, he walked out of City Hall to find a note on the windshield of his car.
"This is a Chevron town, and we owe our existence to them and should be grateful. Get that through your head," it read.
The note ended: "Beat it!!!!!!!"
After decades of mostly prosperous times for the city and the oil company, El Segundo is having a falling-out with its longtime benefactor.
A majority of the city council thinks Chevron should pay an additional $10 million a year in taxes -- about three times what it pays now. But the tax push has stirred strong emotions in the town, which was formed a century ago, when Chevron built its second refinery there. El Segundo ("The Second One" in Spanish) gets its name from the refinery that overlooks the Pacific Ocean and stretches more than a mile inland.
Many residents remain loyal to Chevron and feel the proposed tax increase is unfair.
The dispute has roiled politics in the small, upscale city south of Los Angeles International Airport known for a downtown district lined with mom-and-pop shops, good schools, cool ocean breezes, and the rumble of jetliners.
Although only 17,000 people live in the city, El Segundo's population swells to 80,000 on weekdays as workers roll into town for jobs at Northrop Grumman, DIRECTV, Raytheon, Mattel, Boeing and Chevron.
The tax battle began late last year when Mayor Eric Busch asked Mr. Willmore, the former chief executive of Salt Lake County in Utah, to look into an acreage tax Chevron pays the city.
El Segundo enacted the tax on refineries and chemical plants in the 1980s.
It receives about $5 million a year from Chevron in various taxes, including the acreage tax and the city's cut of the property tax.
But city officials found that other cities with refineries generated significantly more taxes: Nearby Torrance got $9.8 million from the Exxon Mobil refinery, Carson got $10.2 million from the BP refinery, and Richmond, in northern California, got $15.4 million from its Chevron refinery.
"You look at it, and it kind of shocks you," Mr. Willmore said.
"We could double the taxes they pay to the City of El Segundo, and Chevron would still have the lowest tax rate [of any oil refinery] in the state."
First Published February 12, 2012 12:00 am
