California: Proposition 39 – “Clean Energy Jobs Act”

17 Oct

THE PROPOSAL: If passed, Prop. 39 will require out-of-state businesses to calculate their California tax liability based on the percentage of their sales in California. The law would repeal an existing law that gives out-of-state businesses “favorable tax treatment,” and would dedicate $500 million annually to fund projects that create energy efficiency and clean energy jobs in California. The revenue to fund these projects will come from the anticipated tax revenues from the out-of-state companies.

IF YOU’RE A BELIEVER: This bill would generate about $1 billion in additional annual state revenues by repealing the old law that allowed out-of-state businesses to choose how their tax burden was calculated. A newly created Clean Energy Job Creation Fund would be used to support energy efficiency retrofits, finance alternative energy projects, provide financial and technical assistance, and fund job training and workforce development programs. About half of this revenue will be used to create green collar jobs. A sizeable portion of the remaining funds will go to California’s public schools and community colleges.

IF YOU’RE SKEPTICAL: This bill represents another effort to raise taxes and dedicate funds to special interests. The $550 billion dollars that could otherwise go to schools, health and welfare, environmental protection, or public safety is instead diverted to a new government bureaucracy with limited oversight.

WHAT IT MEANS: Like San Francisco’s Proposition C, the “Clean Energy Jobs Act” boils down to allocation of resources and spending priorities. Will voters support a plan to divert a sizable portion of new revenues toward creating jobs in the green economy, even as the state is scrambling to fill its coffers? While most Californians may find it easy to end tax breaks for out-of-state businesses, it isn’t clear that voters will jump on the clean energy jobs bandwagon.

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One Response to “California: Proposition 39 – “Clean Energy Jobs Act””

Trackbacks/Pingbacks

  1. Post-Election Day Roundup « The ELP Blog - November 20, 2012

    […] Proposition 39 passed, closing a tax loophole and providing a source of funding for the newly established Clean […]

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