Democratic governors and mayors seem to be competing to show Democratic primary voters who is most opposed to President-elect Donald Trump. Gov. Gavin Newsom (D-CA) is competing hard for the laurels in this race.
Days after the nonpartisan Legislative Analyst’s Office predicted California would run a $2 billion deficit next year and “does not have capacity for new commitments,” Newsom announced that if Trump keeps his promise to end federal tax credits for the purchase of electric vehicles, he will create a new state program in its place.
“We will intervene if the Trump administration eliminates the federal tax credit, doubling down on our commitment to clean air and green jobs in California,” Newsom said. “We’re not turning back on a clean transportation future. We’re going to make it more affordable for people to drive vehicles that don’t pollute.”
Under President Joe Biden’s Inflation Reduction Act, the federal government forks out $7,500 in tax credits for each EV built in the United States. The Congressional Budget Office estimates this will cost taxpayers $622 billion by the end of 2031. As Trump and Republican tax reform writers seek ways to offset the cost of extending the 2017 Tax Cut and Jobs Act permanently, the $7,500 giveaways will be on the chopping block.
Before 2023, California had its own tax rebate program for EVs, offering buyers $2,500 against the average $56,902 cost of a new electric car. The money came from the state’s Greenhouse Gas Reductions Fund, which receives revenue from California’s carbon emissions cap-and-trade program. However, the cap-and-trade system was so volatile that car buyers often had to wait months to get their rebates. The same fund is used to pay for housing, water infrastructure, mass transportation, and even the state’s high-speed rail project. Wherever Newsom takes money from to pay for an EV rebate program would mean less for housing, water, etc.
EVs are more popular in California than in any other state. Over a quarter of vehicles bought in California are electric. However, even that high uptake isn’t enough to meet the state’s EV mandate, which bans the sale of all gasoline cars by 2035.
Trump will almost certainly challenge that regulation by arguing in his administration’s own rulemaking that California should not be allowed to set stricter emissions standards than those of the federal government. If and when Trump issues such a rule, Newsom will surely fight it in court. Not only did California sue the Trump administration more than 100 times during his first term in office, but Newsom even called a special legislative session to appropriate more money to fight Trump in court.
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However, no matter who wins in court, Californians will be the big losers. The California Air Resources Board issued strict low-carbon fuel standards this month that are expected to raise gasoline prices by 65 cents per gallon next year. According to a University of Southern California Marshall School of Business study, the regulation, plus the state’s new refinery storage mandate and the state’s automatic gasoline excise tax, will hike the price of gasoline by 89.8 cents per gallon in 2025. An average California middle-class family with two drivers will pay almost $1000 a year more in gas taxes because of Newsom’s assault on internal combustion engines.
New numbers from the National Association of Realtors show that 87,000 professionals left the state in the past three months. Texas and Arizona were their top destinations. Maybe someday, Newsom and California Democrats will work with Trump and the Republican Party to help lower the cost of living in the Golden State. However, today is not that day. Newsom is instead planning on more tax hikes, more regulation, and more lawsuits. We expect even more residents to give up and go.
This article was originally published at www.washingtonexaminer.com
