Tax the rich for more EVs? California Democrats split

SACRAMENTO, Calif. — A California ballot measure that would tax the rich to help put more electric cars on the road may seem tailor-made to win support from Democrats in a state known for climate leadership, but Proposition 30 has one notable opponent: Gov. Gavin Newsom. That’s put the Democratic governor on the opposite side of his own party and against his traditional environmental allies.

The proposition before voters would increase the 1. 75% tax on personal income of more than $2 million, or fewer than 43,000 people. Analysts estimate that it would raise $5 billion annually, primarily to buy electric cars and to build charging stations. Some funds could also be used to fight wildfires.

Environmental and health group backers say California needs dedicated funding to speed the transition away from gas-powered cars and help lower planet-warming emissions. Transportation accounts for 40% of California’s greenhouse gas emissions, and increasingly deadly wildfires are another major source of carbon.

” Without something like this, we can’t reach our climate goals,” stated Mary Creasman (chief executive officer of California Environmental Voters). “It’s either all of us who pay, or it’s only the wealthy who can afford to pay. “

Newsom has branded Proposition 30 as a money grab by ridesharing giant Lyft, which has spent at least $45 million backing it. All rideshare trips must be zero-emission by 2030., according to state regulators. Uber has not yet taken a position.

“Don’t be fooled by Prop. 30’s being advertised as a climate initiative, but in reality it was devised by a single corporation to funnel state income taxes to benefit their company,” Newsom says in one TV ad.

Supporters reject that characterization, saying that Lyft got involved after environmental groups were already discussing a ballot measure. Creasman stated that it was important to “call out our own governor and team for lying” about the source of the measure’s origins.

In an election year where Newsom is expected to cruise to reelection for a second term, the fight over Proposition 30 has become perhaps the most contentious of the season for Democrats. It comes months after Newsom’s plan to ban sales of all new gas-powered cars in the State was approved by state air regulators 2035.. Newsom notes that he has already dedicated $10 billion to various programs aimed at boosting EV adoption over the next six years.

Half the money raised in Proposition 30 for electric vehicles would go into an equity account designed to expand transportation options and limit air pollution in low-income or disadvantaged neighborhoods. It could be used for electric cars, cleaner delivery trucks, buses, and even ebikes.

Wildfires, too, have become an increasingly urgent problem as climate change makes the state hotter and drier. The state’s most deadly and destructive wildfires occurred in the past few years. According to the state, wildfires have released more than 85 millions metric tons of carbon dioxide in 2021 — more that the annual electricity emissions.

Lyft supports the measure as it believes reducing carbon emissions is good climate policy.

“Proposition 30 funds this through a tax on individuals who earn more than $2 million a year. Logan Green, chief executive officer of the company, wrote that he was fortunate enough to be affected by this tax and was happy to pay it in order to turn the clock back on this existential threat.

The California Teachers Association, California Chamber of Commerce, and some venture capitalists are joining Newsom in opposing this measure.

The money raised by the tax wouldn’t count toward a state budget rule that says a certain percentage of revenue must go to K-12 education, a provision the teachers don’t like. The nonpartisan Legislative Analyst’s Office stated that the proposal could lead to lower spending in other areas, based on certain budget rules. This is something supporters of the measure disagree with.

Business groups note that California’s personal income tax is already the highest in the nation, and the ballot measure would put it over 15% for the highest earners. The foundation president of the California Chamber of Commerce Loren Kaye also warned that an increase in electric vehicles could cause damage to the energy grid. This argument was rejected by the Newsom administration.

Backers of Proposition 30 include the California Democratic Party, the Clean Air Coalition, the Natural Resources Defense Council and the American Lung Association, which have rejected characterizations that the measure is designed to benefit Lyft specifically, noting there’s no provision that would expressly set aside money for rideshare drivers.

While Newsom’s commitment to electric vehicle infrastructure is important, the state needs a stable, long-term revenue source. The tax increase would last for 20 years if the measure passes.

” We need a consistent, reliable source for funding that can sustain us through both good and bad budget years,” stated Bill Magavern (policy director for the Coalition for Clean Air). He referred to Lyft and said, “If the goal of the Coalition for Clean Air is to limit pollution does it matter who drives the EV?” “