Chevron Settles with Richmond for $550 Million Over Tax Dispute

Chevron has reached a significant settlement with the city of Richmond, California, agreeing to pay $550 million over the next decade. This agreement comes as Richmond drops a proposed ballot measure that sought to impose a new $1 per barrel tax on the company’s Richmond refinery. The city’s finance director had estimated that this tax could have generated between $60 million and $90 million annually for Richmond. Under the terms of the settlement, the funds will be allocated to the city’s general fund, with Chevron not receiving credit for how the money is utilized. Despite the settlement, Chevron will continue to pay its regular city taxes, including the Measure U business license tax, utility users tax, and property taxes. Notably, Richmond retains the right to impose new taxes on Chevron during the settlement period, although the $550 million will be credited against any new tax obligations. The agreement follows a week of intense negotiations, during which Chevron initially proposed a lower settlement of $300 million. In a statement, Chevron emphasized that the settlement allows the company to continue providing essential energy to Northern California while resolving the litigation. Richmond Mayor Eduardo Martinez described the settlement as a starting point for future financial stability, highlighting ongoing concerns about the city’s budget shortfall. City officials, including Vice Mayor Claudia Jimenez, have expressed the need for large corporations like Chevron to contribute fairly to the community, indicating that the proposed refinery tax was aimed at ensuring equitable financial support from the company.