California performs further steps towards its green energy future

With the passing of California Proposition 39, California joins states like New York, Texas, Michigan and Wisconsin in building a new tax structure for stronger funding of renewable energy. The approval directs some $2.5 billion to energy conservation programs allocating about half of the new revenue to environmental goals for five years, and which passed with more than 60 percent of the vote. Prior to the passing of California's Proposition 39, a tax "loophole" offered corporations the option of reducing their income taxes by moving jobs and investments to other states, which not only lost California jobs but prevented the creation of new jobs from companies who might otherwise have relocated to the state. Requiring multi-state companies to pay taxes based on their sales in California, also known as the "single sales factor”, Proposition 39 will generate an additional $1.1 billion per year in revenue and for the first five years after the passing of the initiative, 50 percent of these funds are set aside for solar, renewables and efficiency projects. After five years, 100 percent of the funds will go to education and the general fund. In addition, the state this week will hold its first sale of carbon emissions permits, a key step in the initiation of its "cap-and-trade" program that California hopes will serve as a model for other US states and the federal government. Revenues from those sales, which could reach $11 billion a year by 2020, will also be used for clean energy development.