Prop 30: CA’s Clean Cars And Clean Air Act Explained

CALIFORNIA — If there are two things that California has a lot of, it’s cars and multimillionaires.

As the Golden state embarks on an ambitious goal of banning the sale of new gas powered cars by 2035, lawmakers have identified a source of revenue to help make it happen: California’s top earners. And that's where Proposition 30 comes in.

Proposition 30 would increase the tax on personal income above $2 million by 1.75% and dedicate the revenue to zero-emission vehicle subsidies, building charging stations and zero-emission vehicle infrastructure, reducing greenhouse gasses and hiring and training firefighters to help combat wildfires.

That would push the state tax burden of people earning more than $2 million to 13.3 percent in California starting Jan. 1, if the measure passes.

According to the Legislative Analyst’s Office, the tax would raise between $3.5 billion and $5 billion annually and grow over time. Analysts offered the caveat that the ultra-wealthy’s fortunes rise and fall with the economy and stock market.

Revenue from the tax would go toward a set of funds Support from Proposition 30 comes from the California Democratic Party, environmental groups, firefighter and electrical unions and Lyft. The rideshare giant was drawn in the race by a deadline requiring the majority of California’s rideshare vehicles to be electric. The companies would benefit from subsidies helping lower-income drivers to afford electric vehicles.

The measure’s supporters argue that it would help California battle wildfires and pollution while investing in a greener infrastructure.

“Our air quality is the worst in the nation and among the worst in the world, and our consecutive years of devastating wildfires are poisoning our air, threatening lives and exhausting our brave firefighters,” said Assemblymember Kevin McCarthy told The Sentinel. “With Proposition 30, we have the opportunity to reduce air pollution, curb climate change, and build a bold, long-range plan to fund both our acceleration to EVs and firefighting resources.”

Proposition 30 critics, which includes Gov. Gavin Newsom, argue that it’s a give-away that caters to special interest groups while potentially hurting the economy.

“Prop. 30 is a special interest carve-out — a cynical scheme devised by a single corporation to funnel state income tax revenue to their company,” Newsom told CalMatters. “Californians should know that just this year our state committed $10 billion for electric vehicles and their infrastructure."

Others complain that even the wealthiest Californians can’t afford new taxes.

"California already has the highest personal income tax, gas tax, and sales tax rates in the country,” California Chamber of Commerce CEO Jennifer Barrera said. “We are dealing with record high inflation and economists are predicting a recession. The last thing California needs right now is a tax increase. Higher taxes—especially now—are off the table."

According to Ballotpedia, Proposition supporters raised more than $37 million through the end of September and spent more than $30 million. Opponents, on the other hand, $12 million and spent $13.4 million.