According to a joint 11 Assembly member press release on Wednesday, Democratic Assembly members will introduce a proposal on Thursday for a $400 rebate for all taxpayers to help make up the difference in lost funds due to higher taxes.
Since February, when gas prices really began to shoot up due to many factors including the Russian-Ukrainian War, Republican lawmakers, Democratic lawmakers, and the Governor have been at odds on how to give Californians relief at the pump. Republicans proposed waiving the 51 cent gas tax for a period of between 6 months to a year. The $6 billion usually gained from the tax would subsequently be taken from the state’s estimated $60 billion budget surplus. Governor Newsom, meanwhile, favored a mix of a gas tax holiday in July by delaying the scheduled increase in the gas tax along with a rebate of some sort. Democrats in the legislature simply pushed for a straight rebate, not wanting to interfere with the gas tax due to wanting to keep that revenue stream open and to help continue push Californians into buying electric cars as part of a longer-term plan.
Earlier this week, the Republicans gas tax suspension proposal, AB 1638, authored by Assemblyman Kevin Kiley (R-Granite Bay), failed in the Assembly, 40-18. While Democrats had many reasons to oppose it, the concern most often brought up was that the temporary end of the gas tax could lead to manipulation by oil companies and tie up transportation projects.
“Today the Republican and Independent Members of the Assembly voted to save Californians 51 cents per gallon by suspending the gas tax,” said Kiley on Tuesday. “In addition, 18 members abstained from the vote. Unfortunately, the Supermajority rounded up enough votes to deny struggling Californians this modest measure of relief.”
A $400 rebate plan
With Newsom’s proposal also now targeted to the gas tax, Democrats announced that they will formally bring forward their proposal on Thursday. According to the press release, the proposal will give a $400 rebate to all taxpayers in the state.
California lawmakers are set to announce a $400 rebate proposal for every taxpayer in the state amid increasing gas prices, including those who don’t own a car or drive, according to a release sent Wednesday. The figure, which was calculated by having the gas tax applied for 15 gallon weekly fill-ups over the course of the year, will cost a total of $9 billion – $3 billion more than the Republicans proposal. As with the Republican proposal, the money spent on the rebates will come directly from the states budget surplus.
“Many Californians are feeling severe financial pain at the pump and looking to California’s leaders for help,” said Assemblywoman Cottie Petrie-Norris (D-Laguna Beach) in the release. “This is a better approach than suspending the gas tax, as it would stifle funding for transportation projects and offers no guarantee that oil companies would pass on the savings to customers.”
Despite being targeted, Newsom is expected to also continue pushing for his proposal. With the Democrats’ proposal which pushed for a rebate, and would cost billions, the added gas tax holiday, and the rebate only limited to taxpayers who own a car, could entice Republicans and more moderate Democrats to back the Governors plan rather than the legislative Democrats plan.
“Gas relief has become the new hottest topic here,” said Capitol staffer “Dana” to the Globe on Wednesday. “Everyone really wants to help people with gas cost relief, even if it is to get votes for later this year. But no one can seem to agree on how to do it. A flat taxpayer check seems like the new way to go, but if the Governor can pull off a new plan that takes elements from both plans as well as some ideas of his own, Newsom of all people may bring this about instead of the Democrats in the Assembly. Or he may side with them and drop the gas tax holiday bit. We’ll know more tomorrow.”
A press conference on the Democratic proposal is to be held Thursday morning at the Capitol.
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