Election season in California is in full swing, which means having a clear understanding of the initiatives on the general election ballot is critical. This election’s initiatives cover a variety of compelling topics, yet one of the more controversial of the seven on the ballot is Proposition 30.
Proposition 30 concerns economic policy as well as environmental and energy policy. It aims to increase the existing tax on personal income for Californians earning more than $2 million annually by taxing an additional 1.75% on income above $2 million. Currently, the tax rate for income above $2 million is 13.3%, thus, this initiative would raise the rate to 15.05%. If passed, implementation would begin on January 1, 2023, and the tax would terminate on January 1, 2043, or on January 1, 2033, if the state’s fossil fuel emissions have been reduced to “at least 80% below 1990 levels” (“Prop. 30”).
The tax would generate “between $3.5 billion to $5 billion annually” which would then be allocated into several sub-funds within the Clean Cars and Clean Air Trust Fund (“Prop. 30”). 35% of the tax revenue would go towards the Zero-Emission Vehicle Infrastructure Investment Plan Sub-Fund, 45% would go towards the Zero-Emission Vehicle and Clean Mobility Sub-Fund, and 20% would go to the Wildfire Greenhouse Gas Emissions Reduction Sub-Fund.
Hence, the tax revenue would be directed towards boosting electric vehicle sales, constructing more electric vehicle infrastructure, and wildfire prevention efforts consisting of hiring and training firefighters. This is all in an effort to meet aggressive greenhouse gas reduction targets in California. These targets include reducing emissions to 80% below 1990 levels by 2050 and achieving carbon neutrality by 2045 (“Prop. 30”). To support these goals, the state also plans to “ban all new sales of gas-powered cars” by 2035 and will mandate that ride-hailing companies such as Lyft and Uber ensure that 90% of their miles are driven in electric vehicles by 2035 (“Prop. 30”).
Approximately 80% of the tax revenue would be allocated to rebates for California residents purchasing electric vehicles and to charging station construction. High costs are a major barrier to purchasing an electric vehicle for many low and middle-income residents, thus these rebates seek to increase sales and cushion costs. Transportation is the main source of fossil fuel emissions, “representing nearly 50% of California’s greenhouse gases,” which is why there exists a massive push for electric vehicles (“Prop. 30”). Simultaneously, increasingly severe wildfires are contributing to pollution and poor air quality in the state, therefore, about a quarter of the tax revenue would be directed toward hiring and training firefighters. Overall, California will not be able to reach ambitious climate goals if it cannot shift away from fossil fuels and towards electrification.
Interestingly enough, the largest funder of this ballot initiative is ride-share company Lyft, which donated $15 million out of the $37.1 million in contributions to campaigning committees that support the proposition. While this may seem counterintuitive, Lyft has no choice but to push for the passage of this proposition in response to the pressure to electrify the company. The law would result in electric vehicle subsidies for residents and electric vehicle infrastructure, thereby subsidizing Lyft’s electrification transition as well as preserving the longevity of the business.
Critics of Prop. 30 argue that it is yet another burdensome tax hike in a state which already imposes the highest personal income taxes in the nation, and at a time when inflation is surging and cost of living is unreasonably high. Levying another tax would likely incentivize residents to leave the state. Some of the most prominent opposers to Prop. 30 include the California Chamber of Commerce, Small Business Association, Howard Jarvis Taxpayers Association, the State Treasurer Fiona Ma, California Teachers Association, and — interestingly enough — Gavin Newsom.
Although Newsom is a strong supporter of California’s climate change mitigation efforts, he argues that Prop. 30 is a ploy by Lyft to “funnel state income tax revenue to their company” (“California Proposition 30”). Critics maintain that California already spends millions of dollars every year on electric vehicle and EV infrastructure programs, and Newsom continued by stating, “Californians should know that just this year our state committed $10 billion for electric vehicles and their infrastructure” (“California Proposition 30″). Opponents assert that the state is already capable of funding these programs without passing another law and increasing taxes, as the additional $10 billion along with a “$97.5 billion surplus in this year’s [state] budget” provides more than enough funding (“Prop. 30”). Moreover, the recently passed Inflation Reduction Act at the federal level provides billions in funding for state and local governments across the nation to implement climate change mitigation and electric vehicle programs, something California could certainly utilize if needed.
Some of the notable proponents of Prop. 30 include Cal Fire, Lyft, construction and labor union groups, and California Environmental Voters. Supporters claim that Prop. 30 would bolster California’s ability to meet its greenhouse gas emission reduction goals by producing more funding that would specifically target the “two leading causes of air pollution: Gasoline-powered vehicles and wildfires” (“Prop. 30”). Ideally, this initiative would result in an expedited increase in electric vehicle sales in California as well as an increase in resources for firefighters “who must now work year-round to fight and prevent deadly wildfires” (“Prop. 30”).
Currently, polling data from CalMatters indicates that out of all likely voters, 49% plan on voting for the measure, 37% plan on voting against it, and 14% are undecided.
Prop. 30 is certainly a thought-provoking and nuanced initiative. Whatever your political views may be, understanding all the facets of a piece of legislation and knowing the perspectives of both supporters and opposers is a crucial component of informed voting. I urge all California residents to read up on proposed ballot initiatives, as well as candidates in the running, and exercise their right to vote come November.
Works Cited
“California Proposition 30, Tax on Income Above $2 Million for Zero-Emissions Vehicles and Wildfire Prevention Initiative (2022).” Ballotpedia.
“Prop. 30: Tax Millionaires for Electric Vehicle Programs.” CalMatters.