California governor, lawmakers near deal on gas tax rebate

By ADAM BEAM
Associated Press

SACRAMENTO, Calif. (AP) — Most California taxpayers would get hundreds of dollars in cash to help offset the high price of fuel and other goods under a tentative budget compromise being discussed by legislative leaders and Gov. Gavin Newsom.

The plan would return a portion of California’s record-setting $97 billion budget surplus to taxpayers — but the money would only go to people who made below a certain income level.

Newsom and legislative leaders were still negotiating the state budget on Friday, with talks scheduled to extend into the weekend. While both sides had agreed to a framework for rebates, the overall numbers could change as other parts of the budget are finalized. But in general, the less money people make in a year, the more money they would get from the state.

The current proposal would return about $9.5 billion to taxpayers. Single people who make less than $75,000 per year and couples who make less than $150,000 per year would get $350 per taxpayer, plus an extra $350 for each dependent. That means a married couple earning $100,000 per year with one child would get $1,050.

Single people who make less than $125,000 per year and couples who make less than $250,000 per year would get $250 each plus their dependents. Single people making less than $250,000 per year and couples making less than $500,000 per year would get $200 each plus their dependents.

The proposal was confirmed by Assemblymember Miguel Santiago, a Democrat from Los Angeles. Santiago announced the plan in a news release late Friday afternoon, calling it an agreement between Newsom and the Legislature. But a representative for Santiago’s office later clarified the deal has not yet been finalized.

“As prices increase on everything from gas to baby formula, this rebate will help the vast majority of California taxpayers, including undocumented Californians, with hundreds of dollars in direct cash assistance, providing critical relief during tough times,” Santiago said.

The statewide average price for a gallon of regular unleaded gasoline in California hit an all-time high of $6.44 last week. The average price was $6.35 cents per gallon on Friday compared to the national average of $4.93.

Republicans, who don’t control enough seats in the state Legislature to pass anything, have called for Newsom and Democrats to temporarily suspend the state’s gas tax — which at 51.1 cents per gallon is the second highest in the nation. The tax is scheduled to increase to 53.9 cents per gallon next week, an automatic adjustment that is part of a state law intended to keep up with inflation.

Newsom and Democratic leaders have refused to suspend the gas tax, arguing it would not guarantee a big enough price drop to benefit drivers. They also said it would cost construction jobs as the tax pays for highway maintenance throughout the state.

Instead, they pledged months ago to use the state’s budget surplus to send money directly to taxpayers. But so far, nothing has happened because Newsom and legislative leaders have not been able to agree how to do it. Newsom had proposed sending the money to registered vehicle owners, while lawmakers wanted to send the money to tax filers.

The proposal announced Friday is a compromise. The money would go to taxpayers instead of vehicle owners, but the checks would be larger than legislative leaders had initially proposed.