California voters on Tuesday rejected Proposition 30, a plan to spend $30 billion to $90 billion to subsidize the electric car industry over the next 20 years, with the state’s highest-income Californians footing the bill.
Under the measure, wealthy California residents would have been taxed at 1.75% on reported income in excess of $2 million to fund the program. The marginal tax rate will rise from 13.3% to 15.05%, the country’s highest state income tax.
The Associated Press called the outcome of the race, although official results will be longer.
Many of those opposed to the measure argued that the tax hike had fueled the perception that California could not be counted on to support the business. The move met with aggressive opposition from venture capitalists, bankers, tech company executives and other ultra-wealthy Californians.
Government financial analysts had estimated that $3.5 billion to $5 billion would be raised each year. Of that amount, 80% would have supported the sale of electric vehicles and public car chargers, 20% for wildfire suppression and prevention.
The state has already allocated $6.5 billion in subsidies for electric vehicles and public chargers, and plans to spend an additional $10 billion over five years — excluding Proposition 30 funds.
The Prop. 30 contest was a bit unusual because Democratic Gov. Gavin Newsom contradicted his own party in opposing the measure vigorously, airing and streaming videos that it described as “corporate welfare” and “a cynical scheme to… to snag a giant taxpayer’, labeled a subsidy’ for a scheme ‘devised by a single corporation to channel state income taxes to the benefit of its corporation’.
That company is Lyft, which actually helped draft the proposal and donated at least $45 million to support the Yes campaign. The ride-hailing company is subject to a new state law that requires the majority of its fleet to be powered by electricity by 2030. These cars are not owned by Lyft, but by drivers who have signed a contract with Lyft. These workers would receive Proposition 30 subsidies for electric car purchases in addition to subsidies from the federal government. California could use the money to increase current subsidies for electric cars.
Teachers’ unions opposed the measure, arguing the money was better spent on schools.
The defeat will certainly frustrate those who believe the extra money would have helped California meet its aggressive greenhouse gas reduction goals, including a state ban on the sale of most new internal combustion engine cars and light trucks by 2035.
https://www.latimes.com/california/story/2022-11-08/2022-california-election-prop-30-ev-tax-results California midterm voters say no to EV tax with prop. 30