California voters reject Proposition 30, the ‘millionaires’ tax for electric vehicles

California voters rejected a measure Tuesday that would have raised taxes on millionaires to help more people purchase electric vehicles and fund wildfire prevention efforts across the state.

The defeat of Prop. 30, which was called by the Associated Press at about 11:30 p.m., marked a major victory for Gov. Gavin Newsom, the measure’s most prominent opponent.

The measure asked voters to support imposing raising the income tax by 1.75% on Californians earning more than $2 million a year — or about 35,000 of the wealthiest people in the state. The funds raised by the initiative would go toward boosting subsidy programs for the purchase of electric vehicles, building more charging stations and allowing Cal Fire to hire more firefighters.

Although early polling indicated strong support for the initiative, approval ratings slipped as election day drew closer. Outspoken opposition and an ad from Newsom calling the measure a “Trojan horse that puts corporate welfare above the fiscal welfare of our entire state” is believed to have played a key role in Tuesday’s outcome.

Gavin Newsom vs. Lyft

Critics like Newsom blasted Prop. 30 as a publicly funded handout for ride-share companies like Uber and Lyft, which are facing a fast-approaching environmental regulation requiring that they log 90% of their drivers’ miles in electric vehicles by 2030.

Lyft bankrolled the bulk of fundraising for the measure, contributing nearly $48 million through an independent expenditure committee. Prop. 30 did not specifically earmark any of the funds for Lyft, though it would make it cheaper and easier to buy electric vehicles.

Newsom aligned with the California Republican Party, Teachers Association and Chamber of Commerce in opposition. He was joined by some of his biggest political donors who dropped millions to defeat Prop. 30, including Netflix CEO Reed Hastings and Mark Heising, the founder of a San Francisco-based investment company.

The Democratic governor argued that the climate initiative was a “special interest carve-out” devised to benefit a single company, referring to Lyft.

Supporters, including Lyft, the California Democratic Party and many environmental groups, have called that narrative inaccurate. Although they agreed that Lyft would benefit financially, they argued that the measure would play a broader role in reducing greenhouse gas emissions and helping California reach its ambitious climate goals.

From rising sea levels to catastrophic wildfires to warming temperatures, Californians are already experiencing worsening effects of climate change. A new report released by state scientists last month found that those and other effects of climate change are rapidly accelerating across California.

The governor’s opposition has surprised many environmentalists given his leadership on other efforts aimed at fighting climate change.

In recent months, Newsom signed a new state mandate to stop adding carbon dioxide to the atmosphere by 2045 and state regulators endorsed an effort championed by the governor to ban the sale of new gas-powered cars by 2035.

How Prop. 30 would work

Prop. 30 tax would have raised between $3.5 million and $5 billion annually, according to a state legislative analysis.

Of the anticipated funds raised by Prop. 30, 35% were slated to fund new charging stations, 45% would have gone toward the state’s zero-emission subsidy programs and the remaining 20% was to be used for preventing and fighting California wildfires. At least half of the money set aside for electric vehicle purchasing programs and charging stations would have been required to be spent on projects that benefit residents in low-income or heavily-polluted communities.

After voting in-person on Tuesday at Sacramento’s Clunie Community Center, Acacia Keith, 27, said she marked ‘yes’ in support of the initiative primarily to support wildfire relief programs.

“I think that’s something that’s really needed in California right now,” Keith said.

Meanwhile, focusing on the electric vehicle component, Jessica Barrera, 39, said she voted against the measure.

“I think we’re going really fast on all the electric stuff,” Barrera said. “I’m not opposed to it. I just think we’re taking drastic steps really quickly.”

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