The Walt Disney Co. and the parent of Warner Bros. have each given more than $1 million toward the effort to defeat an initiative on the Nov. 2 ballot that would restore an estimated $1.3 billion in business taxes to the state rolls, records show.
Proposition 24 would repeal changes to the California Legislature made in 2008 and 2009 to the state’s tax code and eventually would restore $1.3 billion to the state’s General Fund, according to the state legislative analyst’s office.
The tax changes benefit companies with workers, property and sales in multiple states — including Disney and Time-Warner Inc. — as well as technology and pharmaceutical firms requiring long lead times for product development.
Burbank-based Disney has given $1.1 million to the “No on 24" campaign, according to the California secretary of state. New York-based Time-Warner, owner of numerous media properties including Burbank’s Warner Bros. studios, has spent $1.5 million to defeat Proposition 24.
Other media companies that have donated substantial amounts to the campaign include Fox Group, CBS Corp., Viacom Inc. and General Electric Co. — owner of NBC Universal.
Education groups are funding the measure, including more than $6.4 million from the California Teachers Assn. Issues PAC.
Proponents say Proposition 24 will restore substantial sums to the state General Fund, benefiting schools. Opponents say the measure would be a job killer, encouraging companies to set up outside the state.
The proposition would undo three tax breaks, including one for multi-state firms, such as the entertainment giants.
In the past, multi-state companies were taxed based on a formula considering the value of their sales, payroll and property in California compared with other locations. Last year, the Legislature gave multi-state companies the choice of paying taxes under that formula or one that considered sales only in California.
Jean Ross, executive director of the nonprofit California Budget Project, said entertainment companies for years sought the change in tax law.
“California could have made the change [to sales only], and that would have increased taxes for some companies and not for others,” Ross said. “But it allows a choice, and it allows companies to choose every year. California is the only state in the nation that allows that.”
Both Disney and Warner Bros. referred calls to Scott Macdonald of the “No on Proposition 24" campaign, who said the measure would simply force jobs from the state.
The ballot question comes at a time when studios are already moving many productions to Canada or other states to take advantage of lucrative tax incentives.
“We want them to have facilities and to expand employment in California, and Proposition 24 will work exactly against that,” Macdonald said.
The two other breaks repealed by Proposition 24 allow companies more flexibility to reduce taxes based on net operating losses in other years and expand their ability to write off investments in research and development.