Tax the rich for more electric cars? California Democrats split

A California ballot measure that would tax the wealthy to help get more electric cars on the road may seem primed to garner support from Democrats in a state known for its climate leadership, but Proposition 30 has one notable opponent: Gov. Gavin Newsom. That put the Democratic governor on the opposite side of his own party and against his traditional environmental allies.

The proposal before voters would impose a 1.75% tax on personal income over $2 million or less than 43,000 people. Government analysts estimate it would raise up to $5 billion a year, mostly to help people buy electric cars and build charging stations, with some also devoting resources to fighting wildfires.

Advocates from environmental and health groups say California needs special funding to accelerate the transition away from gas-powered cars and help reduce emissions that contribute to global warming. Transportation accounts for 40% of California’s greenhouse gas emissions, and increasingly deadly wildfires are another important source of carbon.

“We can’t meet our climate goals without something like this,” said Mary Cressman, chief executive officer of California Environmental Voters. – Either all of us will pay, or the richest who can afford to pay.”

Newsom called the offer 30 bucks from ride-sharing giant Lyft, which has spent at least $45 million to support it. State regulators have mandated that all carpooling trips be zero-emission by 2030. Uber has not taken a position on the measure.

“Don’t be fooled, Prop. 30 is being touted as a climate initiative, but it was actually designed by a single corporation to divert state income tax to benefit their company,” Newsom says in one TV ad.

Supporters reject that characterization, saying Lift came on board after environmental groups had already debated the ballot measure. Cressman said it was important to “call out our team and the governor for lying” about the origin of the measure.

In an election year in which Newsom is expected to be re-elected to a second term, the battle over Proposition 30 has become perhaps the most contentious of the season for Democrats. It comes months after state air regulators approved a Newsom-backed plan to ban most new gas-powered vehicles from being sold in the state by 2035. Newsom notes that he has already earmarked $10 billion for various programs aimed at expanding the use of electric vehicles next year. six years.

Half of the money raised in Proposition 30 for electric vehicles will go into an equity account designed to expand transportation options and limit air pollution in low-income or disadvantaged areas. This could be used to help people buy electric cars or to put cleaner trucks, buses and even e-bikes on the road.

Wildfires are also becoming an increasingly pressing issue as climate change makes the state hotter and drier. Most of the state’s deadliest and most destructive wildfires have occurred in the past few years, and the state estimates that wildfires will contribute more than 85 million metric tons of carbon emissions in 2021 — more than annual emissions from electricity.

Lyft says it supports the measure because cutting emissions is good climate policy.

“Proposition 30 funds this through a tax on individuals making more than $2 million a year. I am fortunate to be affected by this tax and am happy to pay it to help turn back the clock in the fight against this existential threat,” Logan Green, the company’s chief executive, wrote in a blog post.

Joining Newsom in opposing the measure are the California Teachers Association, the California Chamber of Commerce and some of the venture capitalists who are helping fund the No campaign.

Money raised by the tax would not count toward a state budget rule that says a certain percentage of revenue must go to K-12 education, which teachers don’t like. Meanwhile, the nonpartisan Legislative Analyst’s Office said the proposal could force spending cuts in other areas based on certain budget rules, which supporters of the measure dispute.

Business groups point out that California’s personal income tax is already the highest in the nation, and the ballot measure would top 15% for top earners. Lauren Kay, founding president of the California Chamber of Commerce, also warned that the rapid expansion of electric vehicles could put a strain on the power grid, an argument the Newsom administration rejected.

Supporters 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 specifically designed to benefit Lyft, noting that there is no provision that directly allocated money for carpooling drivers.

While Newsom’s current commitment to electric vehicle infrastructure is significant, the state needs a more stable long-term source of revenue, supporters say. If passed, the tax increase would last for 20 years.

“We need a consistent, reliable source of funding that gets us through good budget years and bad,” said Bill Magavern, policy director for the Clean Air Coalition. Referring to Lyft, he added: “If the goal is to limit pollution, does it matter who drives the electric car?”

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