Gov. Gavin Newsom says Prop. 30 was devised to benefit one company. Is that actually true?
Max Baumhefner, a San Francisco attorney for the Natural Resources Defense Council, has heard Gov. Gavin Newsom’s claim that Proposition 30 was “devised by a single corporation to funnel state income taxes to benefit their company.”
Yes, Baumhefner said, the rideshare company Lyft was involved in drafting the measure, which would impose a new tax on California’s wealthiest residents. The revenue would be used in part to make it easier for people, businesses and governments to buy zero-emissions vehicles.
But Baumhefner said he was also involved, as were representatives from other environmental and labor groups.
“We support Governor Newsom on a lot of things, but he’s wrong when he says the measure was devised by a single corporation,” Baumhefner said. “To say it’s a shadow coalition is not the case. If it had been, we wouldn’t have supported it.”
Newsom’s outspoken opposition to Prop. 30 places him at odds with much of his Democratic base. That rift widened with his appearance in a recent ad urging Californians to vote “no” on the question.
“Put simply, Prop. 30 is a Trojan horse that puts corporate welfare above the fiscal welfare of our entire state,” he said.
The governor and other opponents point to Lyft’s role as the measure’s primary financial supporter, having already contributed more than $35 million. The company stands to benefit, they argue, because the tax revenue would help its drivers pay for electric vehicles, and underwrite Lyft’s compliance with a looming state mandate. By 2030, 90% of the passenger miles driven by Lyft and other rideshare companies must be with electric vehicles.
Noticeably absent from the conversation is Uber, another major rideshare company. It has not publicly announced its position on the measure. Representatives for the business did not respond to emailed requests for comment.
Lyft and other Prop. 30 supporters acknowledge the company’s drivers could receive financial help. But that is because they are Californians, not because they work for Lyft. The proposition does not explicitly mention the company, or its drivers.
In a recent blog post, Lyft’s CEO Logan Green said he committed the company to the measure because of the urgent need to reduce emissions. Prop. 30’s true beneficiaries, supporters contend, are the millions of Californians who breathe some of the country’s unhealthiest air, because it will help the state move more quickly away from gas and diesel vehicles.
“California has the most difficult air pollution challenges in the United States,” said Will Barrett, who leads the American Lung Association’s clean air efforts in California. “At its core Prop. 30 is looking to address the most difficult challenges we’re facing.”
Newsom’s opposition to the measure has turned the November vote into a test of his credibility with voters. A Public Policy Institute of California poll this month showed 55% of likely voters supported Prop. 30. But interviews for the survey took place before Newsom’s ad ran online and on television.
What is Prop. 30 and what would it do?
If it passes, Californians making more than $2 million a year will pay an additional 1.75% income tax.
A state analysis estimated the new tax would raise about $3.5 billion to $5 billion per year. It would go into a special trust fund, separate from the state’s General Fund.
Along with funding incentives to buy zero-emissions cars, trucks and buses, tax revenue would be used to build charging stations, including in low-income communities. Roughly one-fifth of the proceeds would be set aside for strengthening wildfire prevention and response efforts.
The tax would begin in 2023 and last for 20 years unless the state dramatically reduces its greenhouse gas emissions before then.
If it does not pass, there would be no changes to the state’s personal income tax rates.
Was Prop. 30 devised by Lyft?
Denny Zane is policy director at Move LA, an organization that pushes for public transportation in Los Angeles County. He said Prop. 30 was borne out of conversations in 2020 between Move LA and the San Francisco Bay Area Planning and Urban Research Association, also called SPUR.
What followed was a series of virtual meetings that involved current and former political leaders, representatives of state agencies and environmental organizations and others. During the first session, held in October 2020, Zane introduced the idea of a ballot measure that could help roll back climate change, clean the state’s air, and advance social justice, according to a recording.
“This measure has its origins in the community,” Zane said.
Nick Josefowitz, chief policy officer for SPUR, said he helped put together a group of supporters for the initiative and contacted Lyft last fall to see if the company was interested.
“We need everybody rowing together to make this happen,” he said. “We were trying to build as big of a coalition as possible.”
Zane embraces Lyft’s decision to support the measure so aggressively.
“God bless Lyft for being willing to help out,” he said.
Early supporters of the measure also included the California Environmental Voters organization and the California State Association of Electrical Workers. The state Democratic Party is also in favor of it despite Newsom’s opposition.
“Fighting climate change and improving public health are core values of the California Democratic Party,” Rusty Hicks, the party’s chair, said in a statement.
So why does Newsom oppose Prop. 30?
He’s offered a couple different answers. One is that the additional revenue is not necessary because of the state’s existing investments in zero-emissions vehicles and charging stations.
The Governor’s Office directed questions to Dan Newman, a longtime political strategist working with the campaign opposing the proposition. Newman pointed to a recent interview with CNBC in which Newsom said the timing is not right. He questioned the logic of a tax increase when the state is ”already vulnerable to the macroeconomic headwinds.”
He also has some powerful allies.
The California Teachers Association opposes the measure because the tax proceeds would be exempt from a state law that guarantees public schools and community colleges receive a minimum percentage of General Fund revenue. Several people associated with financial companies have donated hundreds of thousands of dollars each to try and defeat it, records show.
Andrew Acosta, a political consultant not affiliated with campaigns for and against the measure, said Newsom may want to keep “tools in the toolbox” in case of an economic downturn.
“If we’re raising taxes on millionaires now, and that’s not money that can help out schools, then that’s potentially one less tool for him,” Acosta said.
There is also the question of whether Newsom wants to run for president in the next election, despite denying an interest in doing so. Strategically selecting an issue where he is fighting his friends can send a message to a wider national audience that he is not in thrall to party interest groups. Newsom could see Prop. 30 as that kind of an opportunity.
This story was originally published September 28, 2022 at 7:00 AM.
