IN PROGRESS: PROP 39: Clean Energy Jobs Act
The Green Chamber endorses the adoption of Proposition 39 or the Clean Energy Job Act which closes a tax loophole giving an unfair advantage to businesses located outside California. Closing this loophole would level the playing field for California based sustainable businesses through increased investment in energy efficiency and clean energy projects, the employment and training of tens of thousands of Californians in the clean energy industry, and an increase in taxpayer savings with new energy efficiency and clean energy projects for public buildings.
At the end of the 2009 state budget negotiations, legislators and lobbyists for out-of-state corporations struck a late nite, last-minute deal (with no public comment or debate) allowing out-of-state businesses operating in California the option to base their income tax solely on their California sales. This gives out-of-state corporations the option to choose a tax formula that lowers their taxes if they have substantial sales in California and a low payroll, an incentive to keep jobs out of California to maintain lower taxes. As a result, this tax loophole provides an unfair tax advantage for out-of-state companies, allowing them to pay lower taxes than their California competitors and discouraging them from locating, hiring or investing in California.
This California tax loophole:
- Costs more than $1 billion a year in lost state revenue.
- Increases unemployment by tens of thousands of jobs by rewarding out-of-state companies for providing fewer jobs in California.
- Raises taxes for California businesses while most other large states have changed their tax laws to not favor out-of-state companies.
- Forces California businesses to pay increased taxes in other states as well as their own.
Prop 39 aims to change this unfair tax advantage by closing the loophole and adopting a “single sales factor approach” which does not consider payroll or property but rather taxes companies on their percentage of sales no matter where they are based (currently implemented by most larger states such as New York, Indiana, Texas and Michigan). This new policy encourages company investment in-state and brings much needed jobs and investment back to California while directing new revenue into clean energy and efficiency public projects that create savings for taxpayers.
Voting Yes on Proposition 39 will:
- Increase state revenues by as much as $1.1 billion per year after 5 years including an additional $500 million in annual General Fund revenues.
- Create a net gain of 40,000 California jobs and 20,000 to 30,000 additional jobs in energy efficiency and clean energy construction jobs.
- Save money for taxpayers by reducing energy costs through energy efficiency and clean energy public projects such as improvements on schools, public service buildings and prison.
- Annually directs hundreds of millions of dollars to repair and update public schools through efficiency and clean energy improvements, meeting a state mandate that half of all revenue go to education.
- Improve public health by reducing air pollution that causes asthma and lung disease as well as removing lead, asbestos, mold and other toxic substances from schools during building upgrades.
- Ensure full financial transparency of funds through tough financial accountability provisions including independent annual audits, ongoing review and evaluation by a Citizens Oversight Board, complete accounting of all funds and expenditures, and full public disclosure.
Supporters of this bill include the Latin Business Association, the Los Angeles Business Council, the Sierra Business Council and small business owners throughout California.
For more information or to pledge your support for Proposition 39, please visit: www.YesOnProp39.com