California governor vetoes tax credit for certain vehicle owners

A bill vetoed by the California governor called for giving certain taxpayers money to not own a vehicle.

Gov. Gavin Newsom vetoed the bill to provide a refundable income tax credit for each person in low-income households without a vehicle.

Sen. Anthony Portantino, D-Burbank, said the bill – SB457 – was aimed at reducing California’s dependence on cars, providing more incentives for walking, bicycling, and reducing greenhouse gas emissions.

A fiscal analysis estimated the bill would cost $900 million in the first year. The amount was projected to increase to $950 million the following year.

Veto message

The governor wrote in his veto message that he supports efforts to incentivize a transition from vehicles to more sustainable transportation.

“However, the estimated cost to implement this bill is nearly $1 billion per year and is not accounted for in the budget,” Newsom wrote.

“With our state facing lower-than-expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending, particularly spending that is ongoing.”

He added that bills with a significant fiscal impact, such as SB457, should be considered and accounted for as part of the annual budget process.

Tax credit bill details

SB457 called for allowing an income tax credit of $1,000 for qualifying households that have zero registered vehicles. The credit would have been applied for the 2023 tax year and would last through the 2027 tax year.

Qualifying taxpayers would include joint filers and heads of household with an adjusted gross income up to $60,000. Single filers with an adjusted gross income up to $40,000 also would qualify.

Action needed

Portantino has said it is time the state more aggressively commits to implementing modes of sustainable transportation.

“SB457 is an important step towards that goal. We can invest in the future by providing financial incentives for Californians to transition from vehicles to more sustainable options,” Portantino said in previous remarks.

He added that single-occupancy vehicles are the number one contributor to greenhouse gases.

CARB vote

The legislative pursuit follows an August vote by the California Air Resources Board to require 100% of sales of new passenger vehicles in the state to be zero-emission by 2035. Gov. Gavin Newsom also signed an executive order for sales of medium and heavy-duty trucks to meet the same requirement by 2045.

Additionally, an income tax credit of 20% for the vehicle cost is available to individuals who own or lease a new zero-emissions vehicle. LL

More Land Line coverage of news from California.