Californians wisely voted in November to close an egregious corporate tax loophole that benefited only out-of-state corporations at the expense of our taxpayers and California businesses. However, the passage of this measure offers something additional that is perhaps even more important the opportunity to restore faith in state government.
Proposition 39 was born out of the same dysfunction that gave rise to California voters' disillusionment with their government.
In the final hours of the 2009 state budget negotiations, late at night, language was slipped into a budget bill to provide a substantial tax break that only benefited out-of-state corporations. To this day it is unclear who was responsible.
What is clear is that out-of-state corporations perversely benefited at great cost to California's taxpayers and businesses. Amazingly, this language incentivized corporations to move jobs and facilities out of our state. And the price tag for this absurdity is $1 billion per year in lost tax dollars for a state that desperately needs the revenue. With this type of nonsense, it is no wonder voters' trust in government is at an all-time low.
Simply put, there is not a single resident of California, a single worker in California or a single business in California that will not benefit by the closing of this corporate loophole.
Proposition 39, the California Clean Energy Jobs Act, was created to reverse this wrong but also to provide substantial dividends to the taxpayers who have suffered, in the form of new jobs and a healthier environment. It helps put California businesses that are creating jobs here in our state on a level playing field with their out-of-state competitors.
According to the nonpartisan Legislative Analyst's Office, closing the loophole will create tens of thousands of jobs in California without raising taxes on a single person or business.
Half of the $1 billion per year in recovered revenue will go to energy efficiency retrofits of public schools and other buildings in California, creating tens of thousands of jobs for the many unemployed. This will have a tremendous environmental benefit, providing cleaner air for us all. The other half of the money will go to the state's general fund with all the revenue going to the general fund after five years part of a long-term budget fix.
And, demonstrating that a "California Comeback" is indeed possible when we all work together, the broad support of voters at the polls reflected the fact that Proposition 39 involved the great mosaic of California voting to put the public interest first, including Democrats, Republicans and independents, labor and business, environmentalists and more than 200 organizations across the state.
The people who voted for this measure put their trust in government at a time when that trust is at an all-time low. As a result, we have a fundamental duty to honor that trust by putting these dollars to work in a manner that creates tangible benefits for the voters to see and understand. We are referring to this as the "Proposition 39 Compact" and it is defined by several key principles that will guide our efforts as we work to deploy this revenue in the most beneficial manner possible.
The principles are simple and clear:
Reduce energy costs and put money back in classrooms.
Reduce pollution, creating cleaner air for our children.
Create accountability and transparency to ensure we invest in line with the voters' will.
Minimize bureaucracy so the public experiences maximum value in real projects.
By eliminating this loophole, California voters have sent a clear message that they want honest, straightforward budgeting, and that they are paying attention to the "boring" details.
In our view, Proposition 39 could be the first of a number of common- sense government reforms that can be brought forward to help lead the California Comeback closing loopholes, leveling the playing field for our people and California-based businesses, and making out-of-state special interests pay their fair share.
Most important, if we are to restore the public trust in government, so that government can be counted on to address our fundamental challenges, the people of California must believe that elected officials are spending public money as if it was their own money.
John F. Kennedy once said, "The basis of effective government is public confidence," and that confidence comes from the public believing that elected officials are spending their tax dollars wisely and putting the interests of Californians ahead of others.
We can and will lead a California Comeback giving our children a state that is succeeding by creating jobs, saving schools money on energy costs to reinvest in the classroom, and helping to clean our environment. The Proposition 39 Compact is but one step in this California Comeback. California let's get to work.