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Politics & Government

Another California gas rebate plan — but little action

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Miguel Gutierrez Jr.
/
CalMatters
Gas prices at a gas station in Sacramento on March 14, 2022.

A group of California lawmakers have another gas rebate plan amid budget negotiations with Newsom, but suspending the gas tax may be a no-go.

A group of California lawmakers on Thursday churned out the latest idea for putting money back in the pockets of residents struggling with sky-high gas prices — but despite the growing pile of proposals, a consensus seems as elusive as ever.

The bipartisan California Problem Solvers Caucus‘ plan: suspend the state’s gas excise tax for one year, ensure 100% of the savings are passed on to consumers, and use part of the state’s massive budget surplus to replace the lost tax revenue for vital infrastructure projects.

  • Assemblymember Adam Gray, a Merced Democrat: “The most important takeaway from this announcement … is that there is now a proposal in California to suspend the gas tax with bipartisan support.”
  • But, as Senate Republican Leader Scott Wilk of Santa Clarita was quick to point out, his caucus had proposed the very same idea last year. “While bipartisan support is welcome, it only matters if the Democrats can help us get the proposal across the finish line,” he said.
  • And it’s unclear if they can. Alex Stack, a spokesperson for Gov. Gavin Newsom, told me in a statement “there’s no guarantee under this proposal that the benefits will be passed on to Californians who’ve been paying more at the pump, and not just go back to oil companies and corporations.”

Furthermore, the Democratic leaders of the state Assembly and Senate have made it abundantly clear that suspending gas taxes isn’t their preferred form of relief.

  • To implement Newsom’s proposal to suspend July’s scheduled increase to the gas and diesel excise tax, lawmakers would need to pass it by Sunday. But the Legislature has yet to introduce any bills on the matter.
  • Stack: “It is clear now that the Legislature will not act in time to provide that immediate, limited relief.”
  • Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon told me earlier this week: “We stand ready to act as soon as the governor joins us in supporting a plan that provides stronger relief for California families.”

Top Senate Democrats unveiled their own relief plan as part of a larger budget blueprint Thursday, about two weeks before Newsom is slated to present a revised version of his January budget proposal. Lawmakers and the governor must agree on a budget framework by June 15 for the fiscal year that begins July 1.

  • Senate Democrats’ pitch: $8 billion in cash rebates, in the form of $200 checks to individuals earning less than $125,000 and each taxpayer and child in families earning less than $250,000.
  • Their budget blueprint also projects California will have a whopping $68 billion surplus — significantly more than the record $45.7 billion surplus Newsom’s administration predicted in January. The Associated Press has more details on their spending proposals.
  • Atkins: This budget means “we’re able to help even more people, bolster their ability to achieve their dreams, and ensure there will be both resources and a more equitable system in place now, and for future generations of Californians.”

… Maybe. The nonpartisan Legislative Analyst’s Office, which advises state lawmakers on fiscal issues, recently reported that in more than 95% of the 10,000 possible revenue and economic scenarios analyzed by the office, “the state faces a budget problem by 2025-26.”

  • Legislative Analyst Gabriel Petek wrote this week: “The central implication of our findings is stark and suggests that in the interest of fiscal resilience, the Legislature should consider rejecting a substantial portion of the governor’s January spending proposals.”

CalMatters is a nonprofit, nonpartisan media venture explaining California policies and politics.