California's least noticed tax initiative got passed overwhelmingly Tuesday – and two big beneficiaries are clean energy and energy efficiency.
California Proposition 39, which closes a loophole on taxes for multistate businesses, is expected to raise $1 billion a year. For the first five years, half of that money is slated to fund energy efficiency and clean energy projects in California schools and other public buildings; half goes to the general fund. After five years, all the money will go to the general fund.
The proposition is expected to create up to 40,000 new jobs in California, according to the state's Legislative Analyst's Office.
The campaign to pass Proposition 39 was largely funded by Tom Steyer, a hedge fund manager who poured almost $30 million into the campaign to pass the measure and threatened to call out any corporation that opposed it. As a result, California Proposition 39 had no organized opposition and easily passed with 60 percent approval.
The initiative eliminates one of the formulas that multistate corporations can use to calculate their California taxes. That leaves the single-sales factor formula, which will raise state taxes on those companies. Antitax groups complained the move would make California less business-friendly.
But clean-energy groups praised the Proposition 39 win.
"California voters not only modernized the state’s corporate tax structure by passing Prop 39, they indicated their strong support for renewable energy, including expanding solar energy and encouraging related investment over the next five years,” Carrie Cullen Hitt, vice president for state affairs at The Solar Energy Industries Association, said in a statement.
– Material from the Associated Press was used in this report.