Yes on 39: Close Out-of-State Corporate Tax Loophole

This one is complicated but definitely worth support.

First, it does one thing that is absolutely positive: it closes a loophole that costs California $1 billion/year from out-of-state corporations. There's no question that loophole should be closed -- the loophole serves no public policy purpose, it just costs us money. The loophole got into the 2009 budget deal and it allows out-of-state corporations to choose between two different ways of calculating what taxes they owe the state. Crazily, they can game the system by switching back and forth each year. The LAO estimates that costs us $1 billion per year. So half of this measure is completely great. And it appears to be something that needs to go through the initiative process: there have been several attempts to fix this in the Legislature, but they haven't been able to get past the 2/3 requirement (arrgh!).

On the spending side, it is mostly good. For the first five years, Prop 39 would put about half the money towards the clean energy projects. The other half, and all the money beyond the first five years, goes towards the state's General Fund (which desperately needs the money -- see Prop 30). I like clean energy, but I'm not thrilled by ballot-box budgeting. That is why I greatly appreciate that Prop 39 only puts that clean energy spending in place for 5 years.

Close a stupid loophole, use half the money for probably-good stuff (clean energy) and the other half for definitely-good (General Fund), and don't tie our hands with permanent spending requirements in the future. Yes on 39.

If you want details, see the California Choices website on Prop 39, including their in-depth info.
If you want super-gory details, see the California Budget Project's brief on Prop 39.
And see the Yes on 39 website for campaign info.