Marijuana

PAGING DANIEL PLAINVIEW: In California, Assembly Democrats are moving forward with a plan to establish a state severance tax on oil to fund education. It might not pass the legislature -- the Golden State requires a two-thirds vote to raise taxes but it could end up on the ballot. And the proposal demonstrates where, with oil companies reporting record profits and states struggling to balance their budgets, legislators will look for new revenues.

The best evidence of this is in Arkansas, where politicians of both parties are competing to raise the severance tax. Gov. Mike Beebe is using the threat of a ballot initiative -- his aides say he is drafting one -- to demand that the severance tax on natural gas be raised. He wants the funds used to fix state highways. (Under severance taxes, states typically tax the market value of natural gas or oil at the time of extraction).