Proposed Tax to Fund ZEVs Makes California’s November Ballot
Program would increase taxes on net incomes of more than $2 million to fund programs for ZEV purchasing and infrastructure.
California voters will consider a new tax on income of more than $2 million on the November 2022 ballot to fund programs for zero-emission vehicles (ZEVs). The tax would generate an estimated $3 billion to $4.5 billion each year, according to the state Legislative Analyst's Office.
Proposition 30, increases tax rates by 1.75 percent on personal income of more than $2 million for individuals and married couples. The initiative requires that new tax revenues are allocated to programs for zero-emission vehicle purchases:
ZEV incentives and mobility: 45 percent of the revenues would be allocated for rebates and incentives for the purchase of ZEVs. This includes programs to support the purchase of ZEVs for schools, zero-emissions transit buses, and trucks and off-road equipment. It also includes programs for other zero emissions transportation options. At least half of this funding would go to programs that primarily benefit low-income communities.
ZEV infrastructure: 35 percent of the revenues would be allocated to California Energy Commission programs to increase the availability of charging stations for zero-emission vehicles, with at least half of this funding directed to low-income households and communities.
Wildfire prevention and suppression: 20 percent of the revenues would be allocated to wildfire prevention and suppression programs.
The tax would sunset depending on the state’s reduction of greenhouse gas (GHG) emissions. It would end the earliest of January 1, 2043, or beginning January 1, 2030, the January 1 following three consecutive calendar years in which statewide greenhouse gas emissions have been reduced by 80 percent below 1990 levels.
The promotion of ZEVs is a critical component of California’s goal to reduce greenhouse gas (GHG) emissions, and the state has developed different programs meant to promote their use. The California Air Resources Board (CARB) included “rapidly moving to zero-emission transportation” as part of its draft 2022 Climate Change Scoping Plan.
Governor Gavin’s Newsom outlined a full transition to ZEVs in his Executive Order N 79-20. Newsom ordered that by 2035, all new passenger cars and trucks sold in the state must be ZEVs and that by 2045, all medium- and heavy-duty vehicles sold in the state would be ZEVs where feasible. The same would apply to drayage trucks, which carry freight from ports, off-road vehicles, and equipment by 2035.
“This is the most impactful step our state can take to fight climate change,” Newsom said. “For too many decades, we have allowed cars to pollute the air that our children and families breathe. Californians shouldn’t have to worry if our cars are giving our kids asthma. Our cars shouldn’t make wildfires worse—and create more days filled with smoky air. Cars shouldn’t melt glaciers or raise sea levels threatening our cherished beaches and coastlines.” (see article.)