Proposition 39 on Tuesday's ballot would require multistate businesses to calculate their California income tax liability based on the percentage of their sales in California.
The initiative would generate $500 million in the 2012-2013 fiscal year and $1 billion in each fiscal year beginning in the 2013-2014 fiscal year, according to an estimate from the Legislative Analyst's Office and Director of Finance Ana J. Matosantos.
For the first five fiscal years Proposition 39 would be in effect, half the revenues it raised, up to a maximum of $550 million, would be transferred annually to the Clean Energy Job Creation Fund created by the measure. The fund would support projects intended to improve energy efficiency and expand the use of alternative energy.
Proposition 39 would also create a nine-member oversight board to annually review and evaluate spending from the fund.
"Proposition 39 is a win-win for all Californians and is just what we need to help jump-start our state's economy," Mayor Antonio Villaraigosa said. "Closing this loophole will create tens of thousands of new jobs while making California businesses more competitive and encouraging companies to hire and invest in-state, a change we desperately need."
The California Manufacturers and Technology Association, which opposes Proposition 39, said calling the 2009 change to the formula to determine the amount of taxes multistate businesses pay a loophole is "false and misleading."
The association also claims that Proposition 39 will not spur economic development and job growth. It says that giving another $500 million annually to programs related to energy efficiency and creating a new board to review the spending "when public safety, schools and low-income programs are competing for budget resources does not make any sense."