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California voters said no to taxing the rich to make EVs more affordable

Despite a looming ban on gasoline cars, Californians rejected Prop 30, a measure to boost cleaner vehicles.

A driver charges his electric vehicle at a charging station as the California Independent System Operator announced a statewide electricity Flex Alert urging conservation to avoid blackouts in Monterey Park, California on August 31, 2022.
California voters rejected a proposal to raise taxes on wealthy residents to pay for electric vehicles.
Frederic J. Brown/AFP via Getty Images

California voters on Tuesday rejected a ballot measure that would have raised taxes on the state’s wealthiest residents to accelerate the sales of electric cars, particularly for low-income residents.

The measure, Proposition 30, was meant to help the Golden State meet its aggressive clean air and climate change ambitions. Transportation is the largest source of greenhouse gas emissions in the US. In August, California’s Air Resources Board cemented a ban on the sales of gasoline and diesel cars by 2035. The state passed a law in September that requires it to cut its emissions 40 percent relative to 1990 levels by 2030 and zero out its contributions to climate change by 2045. Legislators also approved close to $54 billion to fund climate change adaptation and mitigation.

“There is just no feasible path to meeting our climate, air quality, and equity goals without zeroing out tailpipe pollution,” said Max Baumhefner, a senior attorney for the Natural Resources Defense Council, one of the groups backing Prop 30.

To help meet this goal, Prop 30 aimed to subsidize electric cars, charging stations, and fund wildfire protection. The money was slated to come from a 1.75 percent tax on incomes above $2 million. Advocates estimated that it would raise $100 billion over 20 years, with more than half of the money earmarked for low-income and disadvantaged communities. The vote came on the anniversary of the 2018 Camp Fire, the deadliest and most destructive wildfire in the state’s history.

Prop 30 was one of the most overtly redistributive climate policies ever put to a vote, and initially, it was popular. Polls over the summer showed two-thirds of Californians were in favor. But business groups along with California Gov. Gavin Newsom aggressively opposed Prop 30, tilting the scale against it. Newsom said in an ad that Prop 30 “was devised by a single corporation to funnel state income taxes to benefit their company.” That company, the car-hailing company Lyft, spent $45 million lobbying for Prop 30. Still, there was no specific carve-out for Lyft in the measure, and the vast majority of the benefits of the bill would accrue to individuals, not companies.

As of Wednesday morning with 41 percent of ballots reporting, 59 percent of Californians voted against Prop 30. The Associated Press called the measure defeated.

Many of the dynamics here are unique to California. “It can be easy to over-interpret this one vote one way or the other,” said Shaun Bowler, a political science professor at the University of California Riverside, in an email.

But much of the rest of the country has a habit of following California, particularly when it comes to cars. As other states consider ways to meet their own climate goals, the failure of Prop 30 could offer some important lessons.

What does the failure of Prop 30 mean for the rest of the country?

In the transition toward clean energy, one of the big concerns is that the people who are most directly affected by problems like air pollution and the impacts of climate change are often the last to see the benefits of environment-related jobs and low-emissions technology.

That’s particularly true when it comes to cars. Low-income, minority, and disadvantaged communities often have more roads and fewer green-spaces, and those roads contain disproportionately older, more polluting vehicles. That’s why environmental campaigners have adopted the idea of a just transition to help ensure that environmental as well as economic benefits are spread more equitably as societies adapt to and mitigate climate change.

Electrifying vehicles in low-income communities is one way to do this. More EVs and fewer gasoline cars would have immediate health benefits while also reducing contributions to climate change. It would also benefit companies like Lyft.

“Generally speaking their drivers are lower income and would need help to buy these cars — so yes that’s a good thing and this is a way to get someone else to help pay for those new cars/offset the cost,” Bowler said.

But EVs are still expensive compared to gasoline-powered cars and trucks. The average car price in the US this year was around $48,000, while the average electric vehicle cost $66,000. Even with subsidies targeted toward low-income people, EVs may not be affordable enough for most until manufacturers drop prices much further.

“I think we need to manage expectations,” said Catherine Wolfram, a visiting professor at the Harvard Kennedy School who studies energy and environmental economics. “Prop 30 would soak the very, very rich, but I don’t think we can kid ourselves that it’s helping the poor.”

Another issue is that if California raises taxes on wealthy people further, some of those residents could go to other states. “I think it’s probably better that it happens at the federal level rather than the state level,” Wolfram said.

The federal government has already enacted some major measures to put more electric cars, trucks, and buses on the road. The Bipartisan Infrastructure Law and the Inflation Reduction Act both allocated billions of dollars for electric vehicles and charging stations.

The cynical read of Prop 30’s failure is that politicians, even in blue states, will go out of their way to protect their wealthy donors, even at the expense of their stated climate change goals. Taxes are an especially tough sell. Voters in Washington State twice flinched at enacting a carbon tax when it appeared on the ballot.

But the fact that a majority did support Prop 30 initially signals there’s appetite for progressive measures to address rising average temperatures. “At a high level, every state should be looking at how those most burdened by air pollution realize the benefits of reducing air pollution soon,” Baumhefner said.

And states should set their sights beyond cars. For low-income communities, the most effective solution to local pollution and climate change may not be switching to cleaner cars, but getting off of cars altogether. Improving public transit, creating more walkable neighborhoods, and smaller electric vehicles like bikes could yield larger health and environmental benefits than just EVs.

It’s clear though that even for a state like California that set zero greenhouse emissions as a destination, there are still messy arguments about the best route to get there, and there are plenty of potholes on the road ahead.