A California measure would tax the wealthy to fund electric vehicles. Why is the governor against it? | California

Two years ago, California Governor Gavin Newsom issued an executive order banning the sale of new gas-powered vehicles by 2035.

This year, he opposes a ballot measure to fund the transition to electric vehicles — on the Republican side and against fellow Democrats, environmental groups, firefighters and unions.

The governor’s counterintuitive stance could be a political gamble. It can also condemn the measure; support appears to have dropped after Newsom cut an ad against him.

The measure, Proposition 30, would raise taxes by 1.75% on those earning $2 million or more a year, raising between $3 billion and $5 billion a year to subsidize households, businesses and schools; buy zero-emission cars, trucks and buses; finance infrastructure to charge electric vehicles; and strengthen forest fire prevention efforts.

Proponents of the measure, including the coalition of environmental and labor groups that developed it, say the tax would provide the funds urgently needed to accelerate the transition to zero-emission vehicles and reduce the disproportionate burden of pollution on low-income minority communities across the state. According to the American Lung Association, which endorsed Prop 30, the United States could save 110,000 lives and $1.2 billion in public health costs by 2050 if it swaps gas-powered vehicles for cars zero emissions.

Newsom and opponents of the proposal say it’s a corporate exclusion for Lyft, the ride-sharing company that backed the measure and helped fund his campaign.

“Prop 30 is billed as a climate initiative,” Newsom says in an advertisement against Prop 30. “But in reality, it was designed by one corporation to funnel state income taxes to benefit their Put simply, Prop 30 is a Trojan horse that puts corporate welfare above the fiscal welfare of our entire state.

The message left some of the organizers and activists who helped draft the measure stunned.

“It’s just plain wrong,” said Denny Zane, founder and policy director of Move LA, a transit advocacy group that helped develop the proposal. Lyft joined the effort to promote the proposal after environmental groups and policymakers came up with the idea, he said, but the company did not “design” the proposal.

Renovation of transport infrastructure

Lyft has donated more than $15 million to support the measure and funded the collection of signatures to get it on the November ballot. Although it would not directly benefit from the proposal, it and other ride-sharing companies face a regulatory deadline of 2030 to transition the majority of their fleets to electric vehicles. Proposition 30 could help Lyft drivers, who are responsible for providing their own cars, buy zero-emission vehicles.

“It’s nonsense to say that we’re granting some kind of exclusion specifically for Lyft,” said Bill Magavern, policy director for the Coalition for Clean Air, a statewide organization focused on pollution issues. air.

Proponents of the funding measure point out that the $10 billion Newsom’s budget has already allocated for subsidies and infrastructure for electric vehicles would help Lyft drivers in the same way. And Prop 30 funds would ultimately flow to the California Air Resources Board, California Energy Commission and Cal Fire, the state firefighting agency, which would allocate the money to various programs.

Newsom argues that California’s tax revenues are “notoriously volatile,” and the measure would make the state’s finances even more unstable. A wealth tax, the governor says, would not be the best way to fund the programs Prop 30 seeks to support. Additionally, he noted that the state has already earmarked $10 billion for electric vehicles specifically and $54 billion for climate adaptation in general.

But environmental and transportation experts say even such massive investments won’t be enough to transition the state’s transportation infrastructure.

Magavern and other conservationists instead see the governor’s stance on the proposal as a sellout to wealthy donors. “You have billionaires and their allies who don’t want to pay their fair share of taxes,” Magavern said.

Among the biggest donors to the “No on 30” campaign are William Fisher, hedge fund manager and head of Gap Inc, and billionaire venture capitalist Michael Moritz, according to public records. Investment firm founder Mark Heising, who contributed the maximum amount allowed to Newsom’s 2022 re-election campaign, also contributed $1 million to oppose Prop 30.

The California Teachers Association, which opposed the measure because it circumvents a 1998 mandate that at least 40% of the state budget go to public education, joins those donors, Newsom and the anti-tax Republican politicians.

Opinion columnists and political pundits speculated that Newsom’s party with the teachers and his traditional enemies – the Republicans – could help bolster the governor’s political future. Although Newsom has repeatedly denied intending to run for president, his recent nationwide campaign ads have sparked speculation to the contrary. Newsom’s position on Prop 30 could easily fit into a presidential pitch that he distinguishes between California progressiveness and nationally appealing moderation, these columnists and pundits argued, and that he doesn’t does not blindly side with his own party and sometimes works with Republicans and business interests.

The governor’s campaign did not respond to detailed questions regarding the political implications of this opposition to the proposal. “Proposition 30 is fiscally irresponsible and puts the profits of a single company ahead of the welfare of the entire state,” the governor said in a statement.

Meeting the State’s Zero Emissions Goals

California will need to make major investments if it is to meet its clean energy goals.

As more electric vehicles hit the road, the state has set a goal to build 170,000 more public charging stations over the next three years. And California should invest in strengthening its already fragile electric grid system.

“The governor has backed record levels of investment in this year’s budget, which is great news, it’s what we need,” said Don Anair, an expert in zero-emissions transportation technologies and infrastructure. to the Union of Concerned Scientists, which supports Prop 30.

But it’s unclear how much will be invested in electric and zero-emission vehicles in future annual budgets, including after Newsom’s departure, Anair said. “We need a long-term, large-scale revenue stream to achieve state goals.”

The need for investment is now urgent, Anair added. Even if the state phases out gas-powered vehicles by 2035, cars, buses and freight vehicles already on the road or purchased in the next few years will remain on the road for decades unless the California does not encourage or subsidize the purchase of zero-emission options.

One of the limitations of the proposal is that it does not specify subsidies for e-bikes and other programs aimed at moving commuters away from cars altogether. Even electric cars are much less efficient than walking, cycling and public transport – building them requires a lot of energy and resources and encourages urban sprawl. The mining of cobalt, lithium and other rare elements needed to build electric vehicles has raised environmental and human rights concerns.

In the years to come, even greater investments in public transport and urban infrastructure, as well as improvements in the manufacture of electric vehicles, will be necessary to truly tackle the climate crisis.

The proposal “is not going to solve all of our transportation problems,” Anair said. But for now, transportation remains the biggest source of greenhouse gas emissions in California. “Zero-emission transport is therefore of crucial importance,” Anair said. “Climate change is already having impacts and the sooner we can start reducing our emissions the better.”

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