SACRAMENTO, CA - Venture Capitalist Tom Steyer is trying to cement California's standing as the country's "green leader" by spearheading Proposition 39 on the November ballot.
How he wants to pay for the clean energy effort is controversial: take away what he calls a loophole allowing multi-state corporations to choose between two formulas when calculating their state taxes.
It was part of a late-night deal in 2009 to entice Republicans to vote for a state budget.
Since then, companies have chosen the formula that means less money for the state.
"It's crazy to do that," Steyer said. "We can't afford to give away a $1 billion a year to companies out of state."
So Detroit automakers, for example, have a smaller state tax bill; they have few employees here, but big sales of their products in California than companies based in the Golden State.
Some California companies like Genentech said that's not fair. In fact, the Bay Area biotech firm decided to open an office in Oregon to take advantage of the tax break.
Steyer said Prop 39 will stop rewarding companies for creating jobs out of state.
With the $1 billion a year that Prop 39 will bring to the state, half of it will help retrofit public buildings and facilities for alternative energy for five years and help train a workforce to do those projects; the other half would go to the state budget to help schools.
"First of all, it closes a loophole that never should have been there in the first place," Steyer said. "Second of all, it brings overall $1 billion every single year, and third of all, it will create tens of thousands, up to 100,000 jobs."
"Prop 39 is a $1 billion tax increase on California employers," Calif. Manufacturers and Tech Association's Dorothy Rothrock said.
But multi-state companies said changing their tax formula will actually cost California jobs.
"It will simply raise the cost of doing business in the state, and that will hurt jobs," Rothrock said.
But with no formal campaign launched yet to fight Prop. 39, it'll be difficult to reach out to voters.
"It's very hard to understand what the complexities of corporation taxation, and if you don't understand it, you should probably vote no," Rothrock said.
Steyer has put up $21 million of his own money to get voters to approve Prop 39. Steyer admits he does invest in green tech companies, but insists Prop 39 will not boost his portfolio.
By Nannette Miranda