2012 California Proposition 39

John A. Pérez, a state representative from Los Angeles, introduced Assembly Bill 1500 in 2012.[22] The legislation seeks to remove the three-factor method from the state tax code.[11][22] As of August 31, 2012, AB 1500 had failed to gain the necessary support to move forward.[5][8] The extra tax revenue generated by AB 1500 would have reduced tuition costs for state university students by up to two-thirds for families making less than $150,000 per year.[11] A number of large out-of-state companies opposed the bill.[27]

According to independent analyses, passage of Proposition 39 would add $1 billion to state revenue.[14] It would also remove the advantage of building new facilities or hiring employees out-of-state.[6][12] Supporters say that the measure would create up to 40,000 new jobs.[7] Environmental and health groups claim that the extra money for clean energy projects would lead to safer schools and improved public health.[7] The editorial board of The Sacramento Bee said that Proposition 39 represented "how direct democracy should work."[10]

Opponents of Proposition 39 argue that companies will do less business with California because of higher taxes.[7][11] They claim that the some form of the three-factor method has been in the tax code since 1966.[11] Others fear that the proposition will add more bureaucracy and complexity to an already bloated tax law.[7][11] They also point to California's unfriendly business tax climate: The state ranks 48th, according to the Tax Foundation.

• The Bakersfield Californian is in support of the initiative, stating that, "It's time to fix a bad tax policy, created three years ago by the California Legislature, once and for all."[39]
• The Contra Costa Times favors Proposition 39. They write, "State lawmakers have refused to correct the mistake they made in 2009 when, in a late-night budget session, they created a tax incentive for companies to locate outside California. Voters need to fix it for them on Nov. 6 by voting for Proposition 39."[40]
• The Daily Democrat (Woodland, California): "Vote yes on this initiative to end a system that lets out-of-state corporations choose their methods of taxation."[41]
• The Fresno Bee endorsed Proposition 39 on October 1, 2012. They wrote, "If it's approved, the initiative would generate $1 billion a year."[42]
• The Los Angeles Times has endorsed Proposition 39. In a September 27, 2012 opinion piece, they wrote that, "Proposition 39, would raise an estimated $1 billion a year, about half of which would be dedicated temporarily to making public buildings more energy efficient."[43]
• The Marin Independent Journal: "This measure needs to be on the ballot because the state Legislature has refused to close a business tax loophole it approved in a late-night budget decision in 2009."[44]
• The Merced Sun-Star: "The initiative on the Nov. 6 ballot would close a $1 billion corporate tax loophole, one that legislators are incapable of shutting because they are beholden to outside influences."[45]
• The Modesto Bee favors Proposition 39, writing, "Proposition 39 shows how direct democracy should work."[46]
• The Oakland Tribune formally endorsed Proposition 39, writing "Prop. 39 will help keep businesses here."[47]
• The Press-Enterprise: "California has no need for a tax break that puts the state at an economic disadvantage."[48]
• The Redding Record Searchlight has endorsed Proposition 39, writing, "[Proposition 39] ends a billion-dollar giveaway to out-of-state corporations."[49]
• The Sacramento Bee has endorsed Proposition 39. The newspaper advocated that voters approve the measure, writing, "Essentially, out-of-state corporations such as cigarette maker Altria gained the privilege to determine which of two methods of taxation allowed them to pay the least in state taxes, and they are allowed to toggle back and forth each year so as to gain the greatest benefit,... Proposition 39 shows how direct democracy should work."[9][50]
• The San Diego Free Press has announced support for Proposition 39. They wrote that, "Proposition 39 would eliminate the ability of companies to choose between two methods to calculate their taxable income in California and require them to use sales only for the calculation."[51]
• The San Jose Mercury News endorsed Proposition 39, writing, "State lawmakers have so far refused to correct the mistake they made in 2009 when, in a late-night budget session, they created a tax incentive for companies to locate outside California. Voters will be able to fix it for them Nov. 6 by voting yes on Proposition 39."[52]
• The San Francisco Bay Guardian: "It's more fair, it creates the right incentives to keep jobs and equipment in the state, and it cuts a hole in the deficit."[53]
• The Santa Cruz Sentinel: "Ballot-budgeting? Yes. But as it stands, Steyer's Prop. 39 revenue would help create jobs while also cutting down on energy use and greenhouse gas emissions at public buildings -- and the revenue directed toward these causes is limited to five years. More importantly, the tax loophole is egregious and only encourages multistate companies doing business in California to create jobs outside the state."[54]

• The San Francisco Chronicle opposed the initiative in a September editorial, stating that, "Proposition 39, which would direct about half of the extra $1 billion in annual revenue to energy-efficient projects, corrupts a very good idea (tax reform) with a very bad one (ballot-box budgeting)."[55]
• The San Diego Union Tribune opposed the initiative, writing, "We recommend a no vote on Proposition 39."[56]
• The Ventura County Star opposed Proposition 39, stating, "Supporters of Proposition 39 may have had good intentions, but this initiative on the Nov. 6 ballot doesn't measure up to reasonable expectations. The Star recommends a no vote."[57]
• The Pasadena Star-News opposed Proposition 39, writing that, "PROPOSITION 39 is a mixed bag - like so many of the initiatives that appear on California's ballots - that should be rejected."[58]
• The San Bernardino Sun opposed the initiative, writing, "Of the $1 billion or so in additional tax revenue that change would produce, Proposition 39 directs half into energy efficiency and alternative energy projects for four years."[59]
• The editorial board of the Appeal-Democrat opposed Proposition 39 in an editorial in May, writing, "Steyer said the initiative would create green jobs. But taxes kill jobs by sucking money out of the private sector. Similar green-jobs claims were made about Assembly Bill 32, the Global Warming Solutions Act of 2006, by Gov. Arnold Schwarzenegger. But A.B. 32 didn't prevent state unemployment from soaring well above the national rate. California's real employment problem is not a lack of green jobs, but the state's severe anti-jobs climate, to which A.B. 32 and the specter of Steyer's initiative contribute."[60]
• The Los Angeles Daily News wrote "...the measure has two big problems: One, it's yet another example of ballot-box budgeting, directing half the revenue that would be generated into niche projects instead of into the general fund; and two, it goes back on a budget deal that the Legislature made three years ago."[61]
• The San Gabriel Valley Tribune: "California can't stand any more ballot-box budgeting that squirrels away money for a single purpose favored by an initiative's proponents - in this case a hedge-fund billionaire. Proposition 39 creates the Clean Energy Job Creation Fund, another otherwise untouchable pot of money like the First 5 and mental health funds that past initiatives have given us. The purposes are good, but they should be weighed against other priorities like education and care for the indigent and elderly."[62]