California Voters Reject Proposition 30, Tax on Millionaires to Fund Electric Vehicle Subsidies

California voters on Tuesday turned down Proposition 30, a ballot measure that would have placed a 1.75 percent tax on residents earning more than $2 million a year. According to Associated Press estimates, it failed by a margin of nearly 20 percent.

The money was meant mostly to subsidize electric vehicle purchases and charging stations for lower-income residents. Part of the revenue would also have gone to wildfire prevention and clean energy programs. The tax could have added as much as $5 billion to the state's annual revenue. Politicians on both sides of the aisle criticized it.

The vote came in the shadow of a larger policy. In August, the California Air Resources Board voted to ban the sale of new gas-powered cars by 2035, requiring all new cars and light trucks sold in the state to produce no carbon or other greenhouse gas emissions. A rule the board passed the previous year also requires ride-share companies to use zero-emission vehicles for 90 percent of their miles by 2030, five years ahead of the broader ban.

That ride-share rule is where much of the opposition took root. Many opponents argued the measure would unfairly benefit ride-share corporations, and in particular Lyft. Some politicians and legal experts said the proposition was largely backed by the company, and opponents contended Lyft wanted the subsidy to help pay for its own shift to zero-emission vehicles.

Governor Gavin Newsom, a Democrat who won reelection by a landslide the same night, fought the measure hard. His campaign put $1.6 million into the opposition group in the final days before the election. In an earlier statement sent to Newsweek, he called Prop 30 "a special interest carve-out" and a scheme devised by a single corporation to funnel state income tax revenue to itself. He said California's tax revenues are famously volatile and that the measure would make state finances less stable. He also noted that the state had committed $10 billion this year to electric vehicles and their infrastructure, part of a $54 billion climate package. His campaign's Wednesday statement praised him as a climate leader able to do big things without raising taxes.

The opposition group, Vote No on Prop 30, made a separate argument about taxes and migration. It said the hike would worsen the exodus of residents from the state, claiming high taxes had already cost California billions in lost revenue. It also went after Lyft's spending, saying the company put $50 million behind the measure. By the group's math, that sum could have bought 1,125 electric vehicles at $40,000 each for Lyft's Express Drive rental subsidiary, compared with the 185 EVs currently on that platform.

Lyft rejected the framing. Senior Communications Manager CJ Macklin called the result an unfortunate setback for the climate movement and said millions were spent by the opposition to confuse voters. He said Lyft was undaunted and proud to be part of a coalition of environmental, public health, social justice, business and labor organizations.

Clean Air California, the coalition behind the Yes campaign, said millions of Californians had backed a bold measure to fight climate change. It blamed the loss on heavily funded opposition, saying polls had shown majority support until 30 of the world's richest people spent tens of millions of dollars on what it called lies and disinformation, aided by a governor it said would be responsible for the consequences, including more wildfires and air pollution.

With the measure defeated, the questions now are how California will pay for its transition to zero-emission vehicles, and whether ride-share companies can meet the board's 2030 mandate without the subsidy.