Newsom Urges "No" Vote On Proposition 30

By Madison Hirneisen | The Center Square, The Center Square California

September 13, 2022

(The Center Square) – Gov. Gavin Newsom wants voters to reject a ballot initiative that would raise taxes on millionaires to fund electric vehicle subsidies and infrastructure, describing the measure as “one company’s cynical scheme to grab a huge taxpayer funded subsidy.”

Newsom is urging Californians to vote “no” on Proposition 30, a ballot initiative imposing an additional 1.75% tax on personal income over $2 million. The state would then distribute the tax revenue to fund electric vehicle subsidies, EV infrastructure and wildfire prevention.

"The new tax is estimated to generate between $3.5 million and $5 million annually," according to the nonpartisan Legislative Analyst’s Office.

"Ridesharing company Lyft is bankrolling the measure’s campaign, providing $15 million in cash contributions," according to Ballotpedia. Lyft, as well as other ridesharing companies, must transition their fleets to zero-emission vehicles by 2030 under an order issued by state regulators last year.

While Newsom does not call out Lyft by name, a political ad opposing the initiative includes several news headlines mentioning the ridesharing giant. The governor asserts that, though Proposition 30 is being promoted as a climate initiative, “in reality, it was devised by a single corporation to funnel state income taxes to benefit their company.”

“Put simply, prop 30 is trojan horse that puts corporate welfare above the fiscal welfare of our entire state,” Newsom says.

A spokeswoman for Lyft said in an email that “not a single dollar of Proposition 30 is earmarked for the rideshare industry.”

“Prop 30 speeds up a clean energy transition by asking only the wealthiest 0.2% to pay a little more, so the costs don’t fall on working Californians,” the spokeswoman said. “We’re standing with the American Lung Association, state firefighters, climate advocates and others in doing something about the problems, while Governor Newsom stands with his billionaire donors looking to protect their bank accounts.”

While Lyft as a corporation would not directly benefit from the tax revenue, the ballot initiative states that a portion of the revenue is meant to help households pay for part of the cost of new electric vehicles. Since Lyft contracts with independent drivers, some of the company's employees could be eligible for some of the money to help purchase an EV.

The ad represents Newsom splitting from the California Democratic Party, which supports the “Yes on 30” campaign. In addition to Newsom, the Republican Party of California and the California Teachers Association oppose the measure.

“It is disappointing that the Governor would side with the California Republican Party and a handful of San Francisco billionaires who would rather kids breathe toxic, polluted air than pay their fair share,” Clean Air California, the coalition leading the campaign in support of Prop 30, said in an emailed statement to The Center Square.

Bill Magavern, policy director for the Coalition for Clean Air, told The Center Square in an email that the “entire premise of the ad is false,” saying that the proposition comes from an alliance of labor, environmental and business advocates – not just one company – who see the measure as a way to address the climate crisis."

“The money would go to state agencies – controlled by the Governor – to fund existing programs that run out of money every year,” Magavern said. “How can the governor say that adding funds to those programs is wrong, when he himself funds them (insufficiently) through the budget? Recent wildfires, heat waves and drought show that we need to take urgent action.”

Newsom has led California’s drive to increase electric vehicle use and expand infrastructure, signing an executive order in 2020 that directed the state to require all new cars and passenger trucks sold in the state to be zero-emission by 2035. The California Air Resources Board officially adopted the requirement via new rules last month.

The focus of the work of The Center Square California is state and local-level government and economic reporting that approaches stories with a taxpayer sensibility.