An environmental coalition led by hedge-fund manager Tom Steyer is submitting more than 900,000 signatures today to place before voters an initiative to raise more than a billion dollars from out-of-state companies for schools and green building projects.
The measure, pushed by "Californians to Close the Out-of-State Corporate Tax Loophole," needs 504,760 valid voter signatures to qualify for the November ballot.
"We think we're on the ballot for sure," Steyer said in announcing that his group will file its petitions today in all 58 counties.
For the first five years, the initiative is projected to raise about a billion dollars per year, with about half going toward energy conservation efforts at schools and other public buildings. The remainder would go toward the state's general fund.
"With the unemployment in this state, the best thing we think we can do is create clean energy jobs," Steyer said.
After five years, the entire amount raised by Steyer's initiative would go toward the state general fund.
Steyer is teaming with former U.S. Secretary of State George Shultz and with Democratic State Sen. Kevin de Leon to push the initiative, which targets a provision of California tax law that was part of the state's 2009 budget deal.
Current law allows companies to choose the more beneficial of two tax formulas - one based solely on sales in California in proportion to sales elsewhere, the other accounting for sales, payroll and property in California.
Steyer's measure would eliminate the choice and require use of the "single sales factor" - the formula tied to California sales. Democratic lawmakers have pushed for the change, while Republicans have branded it a tax increase.
Assembly Speaker John A. Pérez, D-Los Angeles, is pushing a two-bill package of legislation, Assembly Bills 1500 and 1501, that also would alter state tax law to require the "single sales factor" -- but his plan would earmark the billion dollars for a different purpose -- college scholarships.
Pérez's proposals are pending in the Assembly.
Proponents of the initiative will "stand down" and step aside in favor of Pérez's bills if they pass the Legislature, Steyer said.
"We'd stop campaigning immediately," Steyer said.
Steyer touts his measure as a way to boost the economy, save taxpayers money on energy, and eliminate a tax formula that puts California companies at a competitive disadvantage and discourages firms from locating in the state.
Critics counter that it would hike taxes for out-of-state companies that do substantial business in California, thus discouraging job creation and raising the risk of employee reductions.
Mitch Zak, spokesman for California Employers Against Higher Taxes, a coalition opposing the initiative, said that California already has the nation's worst business climate and that a billion-dollar tax increase would "only make the problem much, much worse."
"Our belief is that the people of California are going to end up sending one loud, clear and unambiguous message that higher taxes are not the solution to California's economic woes," Zak said.
Steyer blasts the opposition arguments as a "complete bunch of hogwash," saying that the initiative would require only that out-of-state companies pay the same tax rate that in-state firms do now. It would generate more jobs, not less -- a projected 100,000 more -- by funding clean-energy construction projects and by eliminating the disincentive for corporations to be based in other states, he said.
The coalition opposing the "single sales factor" consists of five corporations based out of state -- Chrysler, General Motors, International Paper, Kimberly-Clark and Procter & Gamble. Tobacco companies have not joined the effort, but they also are among firms that could be hit hard by the initiative.
Editor's Note: This post was changed to correct the name of the campaign committee pushing Steyer's message. Corrected 12:10 p.m. May 4, 2012.