California legislative leaders craft new gas refund plan


After rebuffing Gov. Gavin Newsom’s proposal to offer tax rebates to exclusively offset rising gas prices, Senate and state Assembly leaders are crafting their own plan to provide broader refunds to meet the rising cost of all assets through payments of $200 for each California taxpayer and dependent.

Assembly Speaker Anthony Rendon (D-Lakewood) and Senate Speaker Pro Tem Toni Atkins (D-San Diego) would limit eligibility to households with incomes up to $250,000, unlike other proposals that would give discounts to even the wealthiest Californians, according to a preview of “Better Rebate for Families” obtained by The Times.

“President Rendon and I are committed to the people of California to find a solution to help people overcome the financial hardship imposed by the rising cost of fuel and consumer goods,” Atkins said. “We are delivering on that promise and have developed a proposal that would help a vast majority of Californians.”

The proposal could cost the state around $6.8 billion, though that figure could change. It is designed to put more money in the pockets of large families with no limit on the number of dependents a taxpayer can claim.

The legislative leaders’ plan is the latest in a series of ideas from the state Capitol to help Californians deal with the high cost of gasoline and other expenses.

Katie Talbot, spokesperson for Rendon, described the plan as being in “very early stages” and said it was “consistent with the president’s goal of providing targeted financial assistance to Californians who need it most. “.

It comes in the middle of an election year and at a time when inflation and interest rates are on the rise, increasing fears about the economic future and financial pressures on the people of California and the country. Record state revenues and a voter-approved constitutional spending cap are also fueling the wave of ideas to send money back to state residents.

A separate group of Democrats this week offered a $400 rebate to each taxpayer. Comparing all the plans, advisers to Rendon and Atkins estimated that these rebates could result in $9.2 billion in lost revenue for the state. Some have questioned whether California’s highest earners deserve the same relief as those struggling to make ends meet.

Republicans had previously called for suspending the 51-cent-per-gallon gas tax for six months, at a cost of about $4 billion in transportation revenue. The plan could save each driver $135, though Atkins and others have stressed there’s no guarantee the oil companies will pass those savings on to consumers. However, the nonpartisan Office of the Legislative Analyst said in a February report that “most of the tax rate change would likely be passed through to pump prices.”

Republican House Leader James Gallagher of Yuba City said he supports sending tax rebates to Californians and suspending the gas tax. Gallagher wants the proposals to go to a vote next week, saying he hopes the much-needed tax relief doesn’t get bogged down in a debate among Democrats.

“As Democrats continue to negotiate among themselves, Californians continue to suffer from these high costs, Gallagher said. “As Republicans, we have our own plan that will bring immediate relief – suspend the gas tax now.”

In January, Newsom proposed suspending the annual gas tax increase for a year, which legislative estimates could cost $500 million in transportation revenue, or about $15 in savings per year. driver.

Newsom appeared to want to go further in his State of the State address this month with a vague promise to put more money back in the pockets of Californians, which his office described as a tax refund for offset gasoline prices. Newsom gave no details and his team quickly backtracked on an adviser’s comments that the rebates would likely go to vehicle owners.

Newsom’s office promised more details of its plan next week and said it would include “funding for public transit so they can provide direct relief to riders.”

Rendon and Atkins immediately pledged to provide substantial tax relief to Californians after Newsom’s speech, but dismissed the idea that the financial relief should reduce funds for road repairs or exclusively offset the cost of the gasoline.

While Rendon generally agrees with many of the tenets of the plan unveiled this week to offer taxpayers $400, he also said he would not support anything that offers refunds to the ultra-wealthy.

Conversely, budget advisers for Atkins and Rendon estimate their plan would send refunds to 90% of taxpayers through the Franchise Tax Board and include a grant program to provide refunds to low-income Californians who do not declare taxes.

“Unlike other proposals, this would withhold essential harmless Proposition 98 funding for schools and resources for road and highway infrastructure and maintenance,” Atkins said Friday. “Right now, families across our state are struggling to stretch their family budgets due to the rising cost of fuel and property – we’re working on a solution that could be the responsible way forward.”

Times writers Mackenzie Mays and Phil Willon contributed to this report.


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