Why Cash for Gas is a Priority for California Lawmakers

Californians face stubborn shortages of necessities — housing, water and perhaps electrical power — but in this election year, politicians are offering numerous plans to give them billions of dollars to offset a sharp increase in gas prices.

Why, with so many other issues needing political attention, are Gov. Gavin Newsom and legislators focused on gas prices, which have spiked due to the Russian invasion of Ukraine? It’s because to the voting public, having to spend more to fill their tanks is a frequent reminder of how living costs have spiraled upward.

Inflation is Election Year Squeaky Wheel

Last week, a new poll by the Public Policy Institute of California found that “Thirty-five percent of Californians say that recent price increases have caused serious financial hardship for themselves or others in their households. Forty-seven percent of lower-income residents say that they are experiencing serious financial hardship due to recent price increases.”

Inflation is now the squeakiest wheel and in an election year — particularly one in which legislative and congressional districts have been altered due to population shifts — and politicians are rushing to apply grease in the form of cash payments.

“We’re taking immediate action to get money directly into the pockets of Californians who are facing higher gas prices as a direct result of Putin’s invasion of Ukraine,” Newsom said as he offered his $11 billion version.

Newsom’s is the most expensive of at least four plans kicking around the Capitol, including a Republican proposal — dead on arrival — to suspend the state’s gasoline tax.

He wants to give all Californians $400 debit cards for each of their cars, capped at two vehicles, plus grants to allow transit systems to provide free rides for three months to about 3 million riders each day, and postponement of a scheduled increase in fuel taxes.

Debate Over Who Should Get Payout

His plan is somewhat similar to one put forth by a group of Democratic legislators, calling for $400 payments to every Californian who has filed an income tax return. However by basing payments on cars rather than tax returns, Newsom’s plan would benefit those, such as the elderly living on Social Security pensions, who don’t file tax returns.

The bigger contrast is between Newsom’s plan and one offered jointly by Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon, which would give $200 payments to taxpayers and their dependents, excluding households making more than $250,000 a year.

No matter which methodology is used for the rebates, the stickiest issue will be whether every Californian who files a tax return and/or owns a car should benefit, regardless of income, or relief should be concentrated on those in lower income strata most affected by inflation.

“I appreciate Governor Newsom’s work on developing another option to bring relief to Californians experiencing the rising cost of fuel and consumer goods,” Atkins said in a statement. “The Senate is focused on ensuring that state money is targeted to those who actually need relief.”

Newsom will contend that providing money to transit systems for three months of free ridership would benefit the working poor who depend on buses and trolleys to get to their jobs. His version does appear to be the most comprehensive of the four.

Rebates Not Expected Until July

Eventually, a compromise will be worked out but that’s likely to take several months. Newsom’s plan assumes that the rebates will be distributed sometime after the beginning of the new fiscal year on July 1.

Republicans are already complaining that only their proposal, a suspension of the state gas tax that would reduce gas prices by about 50 cents a gallon, would offer immediate relief.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of those years working for California newspapers. He began his professional career in 1960, at age 16, at the Humboldt Times. For more columns by Walters, go to calmatters.org/commentary.