Photo: Wesley Tingey/Unsplash
As the Russian invasion of Ukraine progresses, energy prices remain high with little sign of relief any time soon. Californians have been particularly hard hit, and Governor Gavin Newsom proposed a rebate to help drivers at gas stations.
The refund is a proposal that originated in March
Newsom first spoke of a refund in early March, and specific details about the full scheme were revealed on Wednesday. Newsom’s plan is to send $400 debit cards to registered vehicle owners, up to a limit of two per person..
“Today we are announcing a $9 billion tax refund to tens of millions of Californians,” Newsom said, adding that “that direct relief will address the problem that we are all struggling to address and that is the problem of gas prices“, he pointed.
California is the state with the highest cost for gasoline
California currently leads the country in gas prices, with AAA statistics reporting a statewide average of $5,875 per gallon. at the regular fuel pump. That’s a significant increase above the national average, which currently stands at $4,237 per gallon, surpassing all-time highs seen earlier this month.
The initiative also aims to support and encourage public transport
Newsom has also proposed an additional $2 billion grant package, $750 million of which is to support law enforcement agencies. public transport to provide free transportation to passengers for 3 months.
The goal is to allow the 3 million Californians who use public transportation daily to travel without paying the ticket. $600 million of the package will support a break in a fraction of the diesel sales tax for one year, while $523 million will go to offset a break in a planned inflation adjustment in gasoline and diesel tax rates.
Said incentive is still under approval
The measures are subject to negotiation with the California State Legislature, and therefore potential relief is likely to come months later as part of the next state budget. The Legislature must approve its spending plan by June 15, or California lawmakers will lose each day’s salary and expense payments until the budget is approved. If Newsom’s measures go ahead, the state is expected to send gas cards to registered vehicle owners in July.
However, it is not the only relief proposal on the table. A group of Democratic members of the California State Assembly has suggested sending $400 checks to every California taxpayer, with the policy costing a similar $9 billion.
Meanwhile, another proposal would send $200 payments to taxpayers and their dependents, costing $7 billion and supported by Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon. This latest proposal would be means-tested and would only be sent to households earning less than $250,000 a year. Wanting to see relief go where it’s needed most, Atkins stated that “the Senate is focused on ensuring that state money goes to those who really need relief.”
What would be the total cost to California
All these measures may cost billions of dollars, but California is well positioned to act in the current crisis. The state is currently operating with a large budget surplus, which was forecast at more than $45 billion in January and has only increased from there since.
It seems unlikely that many California drivers will complain about a plan in place to put hundreds of dollars back into their pockets while gas prices remain sky-high. The only question that remains is whether the Legislature can pass the measures in a timely manner to adequately support those who are making things difficult right now.
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