Note: SPUR is a co-sponsor of Prop. 30.

What the Measure Would Do

Proposition 30 would increase state income taxes on personal income over $2 million by 1.75% and invest the revenue, estimated at $100 billion over 20 years, in reducing greenhouse gas emissions and air pollution from two sources: transportation and wildfires.

It would reduce transportation emissions by investing in zero-emission vehicles and zero-emission vehicle infrastructure. The measure requires that 50% of these investments benefit people in low-income and disadvantaged communities, for example by supporting low-income households in purchasing an electric vehicle or an electric bike or providing free transit passes to low-income households.

The initiative would reduce emissions and air pollution from catastrophic wildfires by investing in fighting and preventing wildfires, as well as protecting communities and hardening homes against fire damage. These investments include:

1. Retaining, housing, training and hiring more firefighters
2. Improving fire safety infrastructure in fire-prone communities
3. Supporting forest resilience programs, prescribed burns, vegetation management, and watershed restoration and management
4. Expanding wildfire detection and monitoring systems
5. Improving defensible spaces around homes and communities
6. Enabling home-hardening retrofits with a focus on low-income communities

Prop. 30 Investment Allocation

Source: Text of California Proposition 30, https://oag.ca.gov/system/files/initiatives/pdfs/21-0037A1%20%28Electric%20Vehicle%20Funding%20%29.pdf

The California Air Resources Board, the California Energy Commission and CalFire would be responsible for implementing the investment programs and would be bound by strict requirements to design programs that maximize the impact of the measure’s investments on reducing climate emissions and air pollution. The measure would also require biennial audits of all programs by the state auditor to ensure the funds are spent effectively and efficiently.

The Backstory

The two largest sources of greenhouse gas emissions and air pollution in California are the transportation sector^[1] and wildfires.^[2]

Climate change is currently having a devastating impact on California. Nine of California’s 10 worst wildfires have occured in the last decade^[3], and as of this writing 99.76% of the state is experiencing a drought,^[4] costing lives, destroying property, hurting the economy and damaging ecosystems. The Bay Area, in particular, is at significant risk from sea level rise, with more people and property at risk than any other major metro area in the United States.^[5]

Similarly, the state continues to suffer from air pollution. California’s air quality is rated the worst in the country according to the American Lung Association (ALA).^[6] The ALA also estimates that, if left unchecked, air pollution from transportation and power generation will cause 15,300 premature deaths, 440,000 asthma attacks, 2,160,000 lost work days and $169 billion in public health costs through 2050.^[7]

California is also experiencing more catastrophic wildfires, and the cost of fighting these fires continues to increase. State firefighters regularly clock over $1 billion in annual overtime,^[8] in part due to understaffing. More stable long-term funding is needed to respond appropriately.

California has established a goal of achieving net zero climate emissions by 2045. The transportation sector contributes 41% of California’s greenhouse gas emissions.^[9] To meet our climate goals, we must zero-out tailpipe climate emissions by replacing the state’s vehicles with zero-emission models. That’s why the state is phasing out the sale of new fossil fuel-powered passenger cars and pickup trucks by 2035.^[10] Governor Gavin Newsom has also set a goal of phasing out all fossil fuel-powered medium and heavy duty buses, trucks and off-road vehicles between 2035 and 2045.^[11] And the state requires that ride-hailing platforms (such as Uber and Lyft) provide at least 90% of their rides with zero-emission vehicles by 2030.

However, these forward-looking mandates alone have not been enough to materially shift California’s trajectory on climate change, and estimates have California missing its climate goals by 100 years.^[12] While one-time investments from this year’s state budget and significant recent investments from the federal government have helped, they are insufficient to put California on track. As of last year, more than 97% of cars and pickup trucks in California were still powered by fossil fuels.^[13] Estimates have shown that the incremental cost of electrifying California’s transportation sector is approximately $152 billion.^[14] Stable long-term funding is needed to support California’s rapid transition to clean transportation and to support the ability of Californians and California businesses to meet the state’s mandates.

In addition to transitioning to zero-emission vehicles, reducing the need to drive — by investing in transit and by creating walkable communities, for example — remains critical for minimize our impact on the environment. However, neither approach alone will be sufficient for us to meet our climate and clean air goals.^[15] This measure makes investments to both reduce the need to drive and transition to zero-emission vehicles.

Opponents of Prop. 30 have argued that Lyft, a funder of the measure, is attempting to use Prop. 30 to sidestep the financial burden imposed through the state’s regulatory requirement to transition rides on its platform to zero-emission vehicles. However, this measure is designed to scale zero-emission vehicle adoption for everyone, with a particular focus on low-income communities, and not to serve a particular company or industry. Any benefit to ride-hailing companies from Prop. 30 would be the indirect result of low-income people who happen to drive for Lyft or other ride-hailing companies making use of a rebate to purchase a zero-emission car. Rebates to Lyft drivers will represent less than 1% of the measure’s investments. Only about 2.5 percent of the total vehicles registered in California will drive on a ride-hailing platform at some point during a year, and only about 30% of the measure’s investments go to support Californians purchasing zero-emission cars. It is also important to note that, under the state’s current programs, Californians who drive for Lyft are already eligible for rebates to purchase zero-emission cars. While Prop. 30 creates no carve-outs or preferential treatment for Lyft, it does provide needed support to companies in the farming, goods movement and similar industries to help them purchase medium and/or heavy duty zero-emission trucks and tractors, helping make those California businesses cleaner and more competitive.

Analysis by the Wildfire Conservancy also found that the additional resources Prop. 30 would provide to fight and prevent catastrophic wildfires would prevent 300,000 to 500,000 acres a year from being burned, generating an economic benefit to Californians of $11.8 billion in a typical year. That’s a 12-to-1 payoff from the roughly $1 billion annually Prop. 30 would provide in additional resources dedicated to preventing and fighting catastrophic wildfires. The benefit includes avoided losses of life, health, structures, business activity and resources, as well as savings to federal, state and local governments.

The lack of progress on California's climate goals hits low-income people and people of color particularly hard, as they live in communities that will suffer most from drought, air pollution, sea level rise and other impacts of climate change. At the same time, over the past 40 years, the wealthiest Californians have seen their incomes grow significantly faster than the poorest, a trend that accelerated during the pandemic. The number of Californians earning more than $2 million a year has doubled in the last 10 years, and despite concerns that tax rate increases cause wealthy Californians to leave the state, studies have shown no evidence of such tax flight following previous income tax increases over this time period.^[16] In fact, the main reason people are leaving California is high housing prices, not taxes.^[17] Prop. 30’s rate increase would bring the combined federal and state taxes on the vast majority of those Californians earning more than $2 million back to where they were before the Trump Tax Cut in 2017.^[18]

The measure was placed on the ballot by a coalition of environmental, environmental justice, labor, public health and business groups, including SPUR. This measure requires a simple majority (50% plus one vote) to pass.

Equity Impacts

Climate change, air pollution and wildfires disproportionately impact low-income communities and communities of color. On average, Black and Latinx Californians breathe in about 40 percent more particulate matter from cars, trucks and buses than white Californians. Households earning less than $20,000 a year suffer vehicle pollution levels about 20 percent higher than the state average.^[19] Low-income households also disproportionately live in areas of the state that will be exposed to higher risks of climate change and in types of housing that are typically less resilient.^[20] This measure would clean the air, reduce the impacts of wildfires and significantly reduce climate emissions, which would benefit low-income communities and communities of color.

The measure centers equity in the investments of the funds. Half of the transportation-related investments in the measure (40% of the overall investments) must benefit low-income or disadvantaged communities. The investments would make zero-emission cars affordable to low-income Californians. Prop. 30 would also support car-free low-income households and make investments that would reduce miles driven. This includes potential investments in free transit passes, providing access to van pool and car share programs, supporting the purchase of electric bikes or bike share, and investing in bike infrastructure.

The measure also centers equity by relying on a very progressive tax to raise revenue. Only the top 0.2% of California income earners (those earning more than $2 million per year) would see a tax increase.

Pros

• Prop. 30 would help get California on track to meet its climate and clean air goals.
• Prop. 30 would provide stable, long-term investment to clean up California’s transportation sector and move to zero out tailpipe emissions from the state’s largest source of climate and air pollution.
• The measure would tackle the cost barriers to buying zero-emission vehicles and make them affordable to more Californians, especially low- and moderate-income Californians who would otherwise only be able to afford fossil fuel-powered vehicles.
• The measure would increase the number of zero-emission vehicle charging and fueling stations, a step toward making it as easy to charge or fuel a zero-emission vehicle as it is to fill up at a gas station.
• The measure would ensure sustained investments in vegetation management and watershed restoration, which would prevent hundreds of thousands of acres being burned in catastrophic wildfires every year, generating more than $11 billion of annual benefits to Californians.
• The measure would raise revenue in a progressive way, only increasing taxes on the 0.2% of Californians who earn more than $2 million a year.
• The measure centers equity in the problems it's addressing, the distribution of the investments and the source of revenue.

Cons

• SPUR could not identify any cons to this measure. For what opponents say about the measure, see The Backstory.