Would You Ditch Your Car For $1,000 Per Year? Bill Offers New Incentive For Some Californians

If you’re one of the millions of Angelenos who uses a car to get around this sprawling megacity, ask yourself this: what would it take for you to go car-free?

State lawmakers have passed a bill offering a new incentive to Californians considering ditching their cars. Now awaiting Gov. Gavin Newsom’s signature, S.B. 457 would offer $1,000 in annual tax credits to California households with zero registered vehicles.

The bill aims to reduce one of California’s biggest drivers of climate change: cars that run on fossil fuels. Transportation accounts for 41% of greenhouse gas emissions in the state, according to the California Air Resources Board.

But will $1,000 in tax credits each year be enough to convince car-dependent Californians to find other modes of transportation?

At a busy gas station in Highland Park — one of the few offering a gallon of gas for less than $5 — I asked Art Estrada what it would take for him to give up his car. He replied:

Estrada said a thousand dollars wouldn’t go very far these days. Plus, with kids at home, for him it’s not about the money.

“It's just the time,” said Estrada, who commutes from Cypress Park to Santa Monica for work. “Living in Los Angeles, I can't spend two hours on the train.”

The tax credit would only go to lower-income Californians. Individuals earning more than $40,000 per year would not qualify. Nor would households with annual incomes above $60,000.

Move L.A. executive director Eli Lipmen said most current L.A. Metro riders would qualify for the tax credit. Surveys from 2019 showed that 81% of Metro riders had annual household incomes below $40,000.

“We need to do as much as we can to ensure that these individuals continue to remain transit riders,” Lipmen said. He supports the bill, but he expressed doubts that the new tax credit would do much to convince current drivers to get rid of their cars.

Earlier versions of the bill would have offered $2,500 in annual tax credits to anyone forgoing their car, regardless of income.

State Senator Anthony Portantino (D–Burbank), the bill’s author, said he hopes the more targeted version now on Gov. Newsom’s desk will still make a difference.

“The feedback we got was to make it a little smaller of a program and see if the model works,” Portantino said. “To a low-income family, $1,000 is real money.”

If Gov. Newsom signs the bill, it would take effect in 2023.