Proposition 30 which would impose a tax on millionaires to raise additional funds to support the transition to electric vehicles. Its biggest funder is the ride-sharing company Lyft, which, along with other ride-sharing companies, faces a 2030 deadline of having 90 percent of its fleet driving electric vehicles.

The official title on the ballot: Provides Funding for Programs to Reduce Air Pollution and Prevent Wildfires by Increasing Tax on Personal Income Over $2 Million. Initiative Statute.

What The Measure Would Do

Starting next year, Proposition 30 would place an additional 1.75% tax on the wealthiest Californians.

The tax only applies to the personal income of people who make more than $2 million a year, about 0.2% of taxpayers. According to the California Legislative Analyst’s office (LAO), the additional tax would end by January 2043 or earlier if statewide greenhouse gas emissions are significantly lowered before that date.

Here’s how the revenue generated from this additional tax would be required to be spent:

• 45% would go towards rebates, tax incentives and other payments to help individuals, businesses and governments purchase new cars, vans and pick-up trucks that are considered “zero emission” vehicles (ZEVs). ZEVs include battery-powered electric, hydrogen fuel cell, and plug-in hybrid-electric vehicles. The rest of this slice of the pie would go towards other ZEV programs, including helping commercial businesses and governments buy larger ZEVs, such as heavy-duty trucks and buses. Money could also go to programs that get more people out of cars or otherwise help local air quality. 
• 35% would go towards installing and maintaining charging and alternate-fuel (such as hydrogen) stations at apartment buildings, single-family homes, and public locations.
• For each of those first two buckets, at least half the money would be required to go towards projects that benefit communities that are most heavily impacted by pollution and/or are considered low-income 
• The remaining 20% of revenue would go to wildfire response. The priority would be hiring and retaining firefighters. Remaining funds could be used for wildfire prevention efforts such as prescribed burning and thinning forests.

Some useful context: the phrase "zero emission vehicles" means zero tailpipe emissions. Emissions from the tailpipes of gas- and diesel-fueled trucks and cars cause 40% of California's total greenhouse gas emissions.

Arguments For

Supporters argue the revenue generated by this additional tax would speed up the transition to electric vehicles and lower health-harming air pollution from gas- and diesel-powered cars and trucks by subsidizing the costs of transitioning to electric vehicles, which remain largely unaffordable for the majority of Californians, and building more electric vehicle infrastructure to meet the increased demand.

Pollution from the tailpipes of conventional cars and trucks make up about 40% of California’s total greenhouse gas emissions, according to the California Air Resources Board. Supporters say the funding is needed to more quickly reduce this pollution and achieve the state’s climate goal of carbon neutrality by 2045.
The Union of Concerned Scientists says that Lyft and other ridesharing companies may save on the cost of transitioning their drivers to electric vehicles, but that those drivers represent "a small fraction" of the Californians who would benefit.

Supporters also say it will provide much-needed funding to hire and retain firefighters, who increasingly need to work year-round as drought and rising temperatures make wildfires more common and severe.

Notable supporters of Proposition 30 include:

• Lyft
• The California Democratic Party
• Cal Fire Local 2881
• California State Association of Electrical Workers
• California Environmental Voters
• The American Lung Association

See the full list of supporting groups.

Arguments Against

As we noted, 90% of drivers for Lyft and Uber must be driving electric vehicles by 2030.

Opposing groups argue that Lyft is attempting a “corporate money grab” with Proposition 30. They say Lyft is trying to use taxpayers’ money instead of their own to cover the costs of complying with the new regulation.

They also express concern that an additional tax in a state that already has the highest personal income taxes in the nation will lead to more businesses and individuals leaving California.

Opponents say that California has already committed billions to the transition to electric vehicles (the state budget allocates $10 billion over a five-year period to expanding access to zero-emission vehicles for low- and middle-income Californians and expanding charging infrastructure).

The California Teachers Association says the tax sets “a dangerous precedent” for large corporations to receive special-interest government subsidies. Current California law requires that about 40% of revenue coming into the state’s general fund goes to public K-12 schools and community colleges. Generally, personal income taxes are subject to that requirement, but Proposition 30 is written in such a way that revenue generated from it would not be subject to that requirement.

Notable opponents of Prop. 30 include:

• Governor Gavin Newsom
• Republican Party of California
• California Teachers Association 
• California Chamber of Commerce
• California/Hawaii State Conference of the NAACP
• UDWA / AFSCME Local 3930

See full list of opposing groups

Follow The Money

The campaign for Proposition 30 has primarily been funded by ride-sharing company Lyft. Last year California passed new regulations requiring that 90 percent of Lyft and Uber’s drivers be driving electric vehicles by 2030.

Potential Financial Impact

The ballot measure’s official fiscal impact summary statement:

What that means: The additional tax would raise between $3.5 billion and $5 billion every year. State funds allocated for zero-emission vehicle programs every year would increase by $2.8 billion to $4 billion. That’s on top of the some $10 billion dollars the state has already allocated to ZEV-related programs over the next five years (more details).

The legislative analyst says that the proposition would likely not have a big impact on the number of ZEVs that end up on California roads in the long-term. That’s because the state recently passed a law to phase out all new sales of gas-powered vehicles by 2035, which requires automakers to greatly increase their production of ZEVs.

However, the LAO says the additional $2.8 to $4 billion for rebates and other electric vehicle incentives on top of existing rebate programs would be a further pad on the pocket of buyers.

It’s not as clear how much the additional revenue would affect wildfire costs since that depends on the severity of future wildfires. The proposition would increase state funding for wildfire response by $700 million to $1 billion every year. According to the LAO, the state usually spends between $2 billion and $4 billion on wildfire programs, primarily firefighting.

The LAO also notes that Proposition 30 could potentially affect how much the state can spend in other areas. The California Constitution has some limits on the amount the state can spend every year. With the unprecedented nearly $100 billion dollar surplus this year, that spending limit could kick in.

That means the additional revenue generated by Prop 30 and the spending requirements that go with it could force cuts in other areas of the budget. Here’s more background on that spending limit. One big caveat: the economic situation is changing so rapidly it’s unclear how significant this impact could be.

More resources:

• Read more about Proposition 30 in the CalMatters 2022 Voter Guide
• Listen to AirTalk’s breakdown of Proposition 30
• Read the full report from Legislative Analyst’s Office on Proposition 30

Video: 1-Minute Explainer

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