But the measure has two big problems: One, it's yet another example of ballot-box budgeting, directing half the revenue that would be generated into niche projects instead of into the general fund; and two, it goes back on a budget deal that the Legislature made three years ago.
Viewed in isolation, the tax change Proposition 39 makes would be good for California. For one thing, it would produce about a $1 billion boost in revenue from taxes paid by multistate corporations, and for another it would stop penalizing those corporations if they add jobs in our state.
Basically, there are two ways that various states tax corporations with sales and operations within their borders. One way, called the "single sales factor method," taxes in-state sales only. The other, called the "three-factor method," taxes corporations based on their sales, property and employees in the state.
The single sales factor is better for generating and keeping jobs because there's no state tax penalty for adding property and employees to a corporation's in-state operations.
Proposition 39 would require nearly all corporations to use the single sales factor method.
Of the $1 billion or so in additional tax revenue that change would produce, Proposition 39 directs half into energy efficiency and alternative energy projects for four years.
Now, energy efficiency is great. Making schools and other government buildings more energy efficient to save taxpayers money in the long run is a laudable goal. Conserving energy certainly beats importing it.
But California can't stand any more ballot-box budgeting that squirrels away money for a single purpose favored by an initiative's proponents - in this case a hedge-fund billionaire. Proposition 39 creates the Clean Energy Job Creation Fund, another otherwise untouchable pot of money like the First 5 and mental health funds that past initiatives have given us. The purposes are good, but they should be weighed against other priorities like education and care for the indigent and elderly.
Besides, the current corporate tax structure came out of legislative budget negotiations. Some Republicans agreed to vote for temporary tax increases in exchange for this tax break for out-of-state companies. Democrats have had deal-maker's remorse ever since. But it's their duty - not voters' - to fix the tax code through legislative give-and-take. That's why we employ them.
Vote no on Proposition 39.