California Labor Federation Votes to Endorse
Job-Creating Prop 39

Prop 39 Would Close Corporate Tax Loophole, Fund Clean Energy Jobs

SACRAMENTO — The California Labor Federation, representing 2.1 million workers statewide, today officially endorsed Proposition 39, the California Clean Energy Jobs Act.

Prop 39 accomplishes three things to help get our state’s economy back on track: it closes a loophole that gives out-of-state corporations an unfair advantage over those based here, it creates good-paying clean energy jobs and it adds $1 billion a year to support essential public services without raising taxes on Californians.

“Voting ‘Yes’ on Prop 39 is a no-brainer for anyone who cares about growing our economy through the creation of good jobs,” said California Labor Federation Executive-Secretary Treasurer Art Pulaski. “It’s about time we shut down this wasteful corporate tax loophole and use those resources to start investing in California again.”

Prop 39 closes a tax loophole that was put in place in the dark of night as part of secret budget negotiations between politicians in 2009.  The loophole, known as the “elective single sales factor,” gives corporations the option to reduce the taxes they pay to California by keeping jobs and investment in other states. The loophole costs the state tens of thousands of jobs, because it actually rewards companies for hiring outside of California. Eighty percent of the benefits from this loophole go to the 0.1% of California corporations with gross incomes over $1 billion.

Prop 39 closes this loophole and dedicates half of the revenues for the first five years to job-creating energy efficiency and clean energy programs. The other half of the revenue goes toward funding essential public services, like schools, while reducing the budget deficit. The measure will put Californians — especially in hard-hit industries like construction — back to work immediately. Closing the loophole also eliminates the unfair advantage out-of-state corporations have over businesses that operate exclusively in California.

“Proposition 39 will create tens of thousands of California jobs at a time when our state so badly needs them. It will close an unfair tax loophole that now gives companies a huge incentive to fire California workers and hire in other states,” said Proposition 39 chairman Tom Steyer. “The California Labor Federation's support reinforces the fact that Proposition 39 is a win for California workers and families, and for our economy as a whole.”

Closing the single sales tax loophole is a key part of the California Labor Federation’s “Invest in California” jobs plan. In the coming weeks, thousands of union volunteers will communicate with hundreds of thousands of voters statewide about the benefits of Prop 39 to our economy and future job growth.

The endorsement will be publicly announced this morning at a press conference in Los Angeles with Pulaski, Steyer and Los Angeles/Orange County Building Trades Council President Robbie Hunter.

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