A Clean Air Fund or a Corporate Cash Grab? The Lyft-Sponsored Prop 30 By the Numbers
Propositions 26 and 27, the two sports betting measures, might be the most expensive on California's November ballot.
Prop. 28, for arts and music education, might have the most celebrities on its endorsement list.
But Proposition 30, which would raise taxes on the rich to support electric car deployment and combat wildfires, takes the honor of most confounding.
On the pro side is the California Democratic Party, on the other is its most notable member, Gov. Gavin Newsom.
Also on the yes side: Lyft, but also some of the unions that vociferously opposed the rideshare giant's 2020 ballot measure to rewrite state labor law. On the other: the California GOP and its longtime political nemesis, the California Teachers Association.
And depending on which campaign you believe, this is either a taxpayer-funded handout for a single corporation — or a climate-saving spending package opposed by billionaires who don't want to pay higher taxes. Or neither.
If you're still undecided on Prop. 30 — or just curious about how it would work — we've boiled it down to 15 key numbers.
Who Pays the Taxes?
35,000
The approximate number of Californians who earned more than $2 million a year in 2019 and would therefore have to pay up if Prop. 30 passes at last count, according to the nonpartisan Legislative Analyst's Office. Analysts say the number is now probably greater than 40,000. You've heard of "the 1%"? This is an even more rarified set than that: The 0.2%.
30%
The rough share of the state's personal income tax revenue paid by these 0.2%-ers, according to the most recent numbers. Personal income tax isn't the only source of state money, but it's by far the largest. Looking at the entire pot of cash that state lawmakers can draw on for discretionary spending, these select hyper-rich taxpayers cough up about one-fifth.
That's a selling point for backers of Prop. 30. Unless you're rich enough to plausibly be in the market for a private plane, this measure isn't going to raise your taxes.
But for opponents, that narrow source of funding is exactly the problem. The highest earners tend to get the bulk of their money through their investments. Because the stock market and other financial markets soar to higher booms and sink to lower busts than the economy as a whole, the taxes they pay are notoriously volatile. That, opponents argue, makes the super rich a bad source for an ongoing, long-term investment.
15.05%
California's new top income tax rate, if Prop. 30 passes, for as long as 20 years.
That doesn't mean the highest-earning 43,000 will be forking over more than 15% of their entire princely incomes to the state. The new rate would apply only to money earned in excess of $2 million per year.
Now, California's top rate, 13.3%, starts at $1 million of income, which itself was set by a 2004 ballot measure taxing millionaires to fund mental health services. That's already the highest marginal tax rate of any state in the country and far above the national average of 5.5%, according to the Tax Foundation. But it's not necessarily an apples-to-apples comparison. Hawaii, with the second highest top rate of 11%, for example, hits anyone with earnings above $200,000.
Opponents of the measure say such a high rate could chase California's wealthy — and all their cash — out of the state, which would pull the rug out from under the state budget. If that sounds familiar, critics of high taxes on the rich have been predicting an exodus of the elite for more than a decade. There's never been much evidence to back up that narrative.
But this new record-high rate would put us in uncharted fiscal waters, especially now that federal law no longer allows taxpayers to write-off as much of their state tax payments.
Where is the Campaign Money Coming From?
$0
The amount that the proposition earmarks for Lyft.
Maybe you've heard that Prop. 30 is a "special interest carve-out" for the San Francisco-based rideshare company. That's how Newsom, the measure's most recognizable opponent, put it in an ad for the "no" campaign.
Strictly speaking, that isn't true. The text of the measure doesn't mention Lyft, or any company, by name. But Lyft stands to benefit. State regulators are requiring all of California's ridesharing companies to go entirely emission-free by 2030, including 90% electric vehicles in their fleets. By making it cheaper and easier to buy electric cars, Prop. 30 could help Lyft meet that goal without drawing from its own corporate treasury to help its drivers comply.
Hence the next number.
95%
The share of the "Yes on 30" fundraising that comes from Lyft ($45 million and counting of $48 million so far).
That’s why opponents of the measure argue that it's a corporate giveaway.
On Tuesday, the "No on 30" campaign accused the proposition's backers of trying to hide the corporate giant's involvement by listing not "Lyft," but "Lift" as its largest funder in a recent television ad. Attorneys with the "No" campaign say they wrote to station managers across the state demanding that they "stop airing the advertisement with the illegal disclaimer."
Steve Maviglio, a spokesperson for the Yes on 30 campaign, called the misspelling a "typo" that was "immediately corrected."
44
The number of people who have given more than $100,000 to the "No" campaign so far. Their donations add up to about two-thirds of the total haul. The biggest contributors include some of California's highest earners, including Netflix founder Reed Hastings, venture capitalist Michael Moritz and Catherine Dean, chief operating officer of Govern For California, an organization at the center of an influential donor network and that itself has provided the effort with $250,000 in staff time.
Among those top donors, at least 10 of them are billionaires, according to Forbes.
That's why supporters of the measure describe the opposition as funded by the California elite.
Where Does the Money Go for Electric Vehicles?
80%
The share of Prop. 30 revenues — estimated to total $3.5 billion to $5 billion a year — that is set aside to beef up the state's charging infrastructure and to provide subsidies for more people to afford electric cars. Half of that money is set aside for low-income communities. The state has already dedicated $10 billion over a five-year period on these programs. California's recently passed mandate to phase out all new sales of gas-powered cars by 2035 requires massive investments in clean energy.
Here's a breakdown of what that looks like:
- 35% of the total Prop. 30 revenue would go towards building charging stations in homes and apartments. That money will also be used for building fast-chargers in public spaces and fueling infrastructure for medium and heavy-duty vehicles like trucks, buses and off-road construction equipment.
- 45% of all funds would go towards the state's zero-emission subsidy programs meant to help make electric vehicles more affordable. Currently, eligible residents can receive as much as $7,000 or $9,500 in state subsidies, depending on the program. All programs have income limits. Prop. 30 would increase state funding for zero emission subsidy programs by $1.6 billion to $2.25 billion per year, according to the Legislative Analyst's Office. This pool of money is also meant to increase access to other modes of clean transportation that don't require owning a car, including electrifying public transit, school buses and bikes.
$384 million
The federal funding California is expected to receive over the next five years, provided by the Infrastructure Investment and Jobs Act of 2021, will help accelerate the transition to zero-emission vehicles. The money will be used to install charging stations statewide and builds on the state's $10 billion climate investment in electric vehicles. The federal money also includes $68.2 million so that 177 school buses can be replaced with electric models.
Federal subsidies for electric vehicles will be available through the Inflation Reduction Act, where applicants can expect to receive a tax credit of up to $7,500 per vehicle.
18%
So far this year, 17.7% of all new cars sold in California were electric, according to the California Energy Commission. All told, more than 1.3 million electric cars have been sold in the state. Though California is home to just 10% of all cars in the U.S., the state represents 42.6% of all new zero emission vehicle sales sold nationally.
$66,000
The average price tag of a new electric car is about $66,000, but can range anywhere from about $28,000 to upwards of $160,000 for luxury models.
The cost has steadily been decreasing as more models flood the market, but for most people, they're still out of reach. There are more than 115 electric models available, with the Chevy Bolt EV, MINI Electric and Nissan Leaf among some of the most affordable.
How Much Money to Prevent Wildfires?
$1 billion
Efforts to address wildfires would receive only 20% of the funds raised via Prop. 30, but there's plenty of ways to spend the money. The Legislative Analyst's Office estimates that if approved, the proposition would likely increase wildfire response by $700 million, to about $1 billion a year.
That's on top of the new state budget that provides a one-time allocation of nearly $1 billion from the general fund for wildfire-related activities.
Living with wildfires requires big money in California: The state has spent as much as $4 billion a year to fight wildfires, depending on the severity of the fire season. Most of that comes from the state's emergency fund.
Critical to understanding how this new money might be used is to make clear the distinction between two parts of the proposition: allocating funds for "response" and funds for "prevention."
$26 million
The per-unit cost of a new generation of firefighting helicopters. Response generally means suppressing fires that have already ignited. In California, that means employing the largest civilian fleet of water and retardant-dropping aircraft in the world, spinning up choppers and calling in scores of bulldozers, water trucks and nearly 8,000 firefighters and support personnel.
State officials could choose to allocate the new funds to purchase more equipment that helps put out fires. Or Cal Fire could hire more personnel, an effort already underway. The state could also choose to use some of the money to better support Cal Fire's behavioral health unit to address what fire officials have called amental health crisis among hard-pressed first responders.
$582 million
The current state budget allocates $582 million over three years for projects that either seek to prevent fires or boost the resiliency of forests to withstand blazes.
It's a big chunk of the prevention piece, where researchers argue the bulk of the new money should go — doing what we can to prevent fires from starting and minimizing the size and destructive capacity of those that do.
The general term for this method of fire prevention is fuels treatment, and this approach, too, is pricey and difficult to manage. Generally, the money could be spent removing things that burn — trees and brush. To make an impact, that would have to happen on a large scale. So-called mechanical thinning, removing vegetation by hand or with machines, is effective, but also expensive and time consuming.
More efficient and cost-effective are prescribed burns, carefully planned and executed small fires, whose low intensity removes the more flammable plants and small trees, preserving large trees and leaving a healthier and less vulnerable landscape.
There are political, bureaucratic and societal reasons that more prescribed burns aren't undertaken. And, as California remains in the grip of a devastating drought, there's also an ever-narrowing window to safely set trees on fire.
For a variety of reasons, California is not emphasizing fuels-reduction activities. The state has conducted fuels reduction projects on only 4,000 acres this year. Its much-toutedagreement with the U.S. Forest Service pledging to collectively "treat" one million acres in the state by 2025 has not come close to getting there.
Should Prop. 30 free-up unexpected funds to address wildfires, it will be up to Cal Fire and state officials to determine how to prioritize the spending. And, the only sure thing to know about fire in California is that it won't be nearly enough.
40% …
... give or take. That's the share of the discretionary spending in the state budget that is required by law to fund K-12 education. The actual amount varies from year to year anddepends on a formula that very few Californians actually understand.
But the money raised by Prop. 30 would be exempt from that requirement. That's why the California Teachers Association, the state's largest union of educators, opposes the measure, which it says would "set a dangerous precedent."
Where Do the Voters Stand?
✨JUST RELEASED✨ #PPICsurvey finds #Prop30 slips to less than majority support. Also, congressional elections (Dems hold an overall edge across 10 competitive districts), views on US #democracy, the governor’s race + more.
— Public Policy Institute of California (@PPICNotes) October 27, 2022
Full report ⬇️ https://t.co/xpjIAR4vb2
52%
The share of likely voters who oppose the measure in a new statewide poll released Wednesday night.
Only 41% said they support Prop. 30 in the Public Policy Institute of California survey, conducted in mid-October.
That's a dramatic reversal from polling in late September, which still showed a 49% to 37% lead for the "Yes" side. That suggests that the "No" campaign — specifically its decision to trumpet the opposition of the state's popular governor — is having its intended effect. While most Democrats in the new poll still back Prop. 30, most other voter groups are now opposed.
More bad news: As Election Day approaches, public support for propositions tends to decline as undecided voters err on the side of "no."
CalMatters data reporter Jeremia Kimelman contributed to this story.
This article was originally published by CalMatters.
