Newsom Signals He’s Open to Excluding the Wealthiest Californians From Gas Tax Rebate

SACRAMENTO — As California drivers continue to grapple with the highest-in-the-nation gas prices, Gov. Gavin Newsom and state legislators remain miles apart on the broad strokes of a proposal to give residents a gas tax rebate.

Newsom recently outlined new details of his plan, however, that suggest he’s open to excluding the wealthiest Californians from receiving rebates, as some Democratic legislators have insisted.

Three weeks ago, Newsom released his highly anticipated proposal to give Californians relief from soaring gas prices, calling for the state to send $400 gas tax refunds to vehicle owners in the form of debit cards, with a maximum of two refunds or $800 for those with multiple vehicles.

But state legislators have floated multiple competing proposals. Some progressives have pushed to prioritize rebates for low-income people, regardless of whether they own a vehicle. Republicans, meanwhile, have demanded the state suspend the gas tax immediately, in addition to giving rebates to drivers.

Newsom’s administration recently unveiled new details of his plan when it sent lawmakers budget bill language to enact his proposal. Here are five key questions to watch as the debate unfolds:

Would high-income drivers be included?

When the governor first announced his proposal, he called for giving refunds to all vehicle owners, regardless of their income. That sparked some criticism from some Democrats who said wealthy drivers don’t need the money.

But Newsom’s latest proposal includes a provision to potentially cap rebates for luxury vehicles valued above a set amount — signaling he’s ready to compromise. The cutoff amount is left blank in the latest bill language.

H.D. Palmer, a spokesperson for Newsom’s budget team, said the blank cap amount reflects that the governor is negotiating with legislators who’ve called for capping rebates.

“Where we end up, we’ll have to see,” Palmer said.

Legislative leaders have floated their own proposal that would provide tax filers a $200 rebate, along with an additional $200 for each dependent. Their plan would exclude high-income earners by capping eligibility at $250,000 in household income, or $125,000 for single filers.

“The Senate’s focus has been getting real relief to people who need it most as soon as possible,” Senate President Pro Tem Toni Atkins, D-San Diego, said in a statement.

Who else might be excluded?

The bill language Newsom’s administration published also outlines another group of people who could be barred from receiving rebates: drivers who have expired tags or owe money to the DMV.

His proposal would limit rebates to only people whose vehicle registration is valid as of April 6, though drivers with expired or suspended registration would have until June 30 to resolve their issues and pay any fees or penalties. That could include fees owed due to delinquent parking tickets.

Newsom’s proposal would also exclude fleet vehicles and vehicles for which the owner has filed a certificate of non-operation with the DMV.

What about transit riders and city dwellers?

Newsom’s push for gas-tax rebates has sparked protests from some mass transit users and environmentalists who said it unfairly excludes people who don’t drive cars.

The Climate Center, a Bay Area advocacy group, chided the plan this week, tweeting, “@GavinNewsom should accelerate California’s #cleanenergy transition, not subsidize the oil and gas industry with rebates.”

California YIMBY, the housing advocacy group, tweeted that gas rebates “are self-defeating — they reduce funding for critical transportation infrastructure. What California’s workers need is more affordable housing closer to jobs.”

Palmer stressed that Newsom’s $11 billion plan, $9 billion of which would pay for rebates, also includes funding for programs that would benefit transit users, cyclists and pedestrians.

“This isn’t just gas- and diesel-centric,” Palmer said. “It is a very balanced package.”

The governor has asked legislators to approve $750 million in grants for rail and transit agencies to make ridership free for three months. Newsom’s office estimated 3 million Californians ride a bus, subway or light rail daily.

In addition, Newsom’s plan includes $500 million in funding for “active transportation programs,” such as projects to expand bike lanes or make streets more pedestrian-friendly.

The governor also proposes the state fast-track spending $1.75 billion of his $10 billion budget for electric cars, so more money for buyer incentives and to build charging stations could be used in the coming year.

Click here to read the full article at the SF Chronicle

Sacramento Democrats Kill Gas Tax Relief, Transparency

As a participant in capital politics for more than 30 years, I’ve observed many abuses of power. Corruption, pettiness, gross narcissism, and dirty tricks have all increased in recent years both in terms of frequency and shock value. The latest incident, and honestly one of the more disturbing I have seen, occurred in the Assembly Transportation Committee last week.

Californians are reeling at the pump as our gas prices are the highest in the nation. The working poor and middle class are begging the Legislature for relief, which is why Assemblyman Kevin Kiley, R-Rocklin, introduced AB 1638. The bill would simply suspend the gas tax for six months.

Democrats are loath to return money to those who earned it, which is why they planned to ambush Kiley’s proposal. But their plan, much like Putin’s ill-advised invasion of Ukraine, backfired badly.

Although the bill hadn’t appeared on the agenda for the day’s hearing, Kiley was told it would be heard in committee on just a couple of hours’ notice. When he arrived, he noticed an Assembly parliamentarian was in the room, strong evidence that some procedural scheme was being cooked up.

Following the legislative formalities, the first member of the committee to speak on the bill was Alex Lee, D-San Jose. After railing on the oil companies, he immediately moved to strike all the contents of Kiley’s bill and replace it with a new tax on gas suppliers. Revenue from that tax would supposedly be sent out to people in the form of a rebate. So, in a matter of minutes, Kiley’s gas tax cut had somehow turned into a gas tax increase.

Click here to read the full article at the Redlands Daily Facts

Assembly Ambush: Assemblyman Kiley’s Gas Tax Suspension Bill Hijacked

‘Absolutely disgraceful’

“Absolutely disgraceful,” was Assemblyman Kevin Kiley’s response to the attempted ambush of his bill to suspend California’s gas tax while in a committee hearing Monday. His words were stronger when the hijack actually happened.

It was a clear partisan hearing Monday on AB 1638, Assemblyman Kevin Kiley’s bill to suspend California’s .51 cent gas tax. Opposed to the bill were building and trades labor unions, operating engineers, laborers and Democrats. Those supportive of AB 1638 was nearly everyone else.

It was a shocker Monday when Kiley Tweeted that his bill was actually going to get a same-day hearing in the Assembly Transportation Committee. But apparently, he knew something fishy was up.

Kiley opened noting that Maryland and Georgia had just reduced their gas taxes, and the people of those states saw immediate results. He said rebates are a good idea, especially with a substantial state surplus, and should be much larger, returning to overtaxed tax payers more of their own money.

Kiley said suspending the gas tax would be far more effective and provide immediate, targeted relief to drivers. “This should not be a partisan issue,” Kiley said, noting that the Connecticut Legislature and Democrat Gov. Ned Lamont just passed and signed a gas tax suspension bill.

“Californians will be dumbfounded if the Legislature refuses to do this,” Kiley said.

Those individuals, parents, taxpayers, librarians, moms, senior citizens, and working poor, who called in to the hearing expressed their support for suspending the gas tax.

Individuals opposing the bill expressed solidarity with the building trades unions. In opposition, Jeremy Smith with the State Building and Construction Trade Council said, “we are creating another crisis out of a crisis.” Smith claimed AB 1638 would be “setting aside jobs,” despite Kiley specifically addressing this earlier in his opening testimony. Kiley said it was actually written into his bill that any of the gas tax funding set aside for state infrastructure construction improvement projects via Senate Bill 1 would be back filled from the general fund, and from the state’s vast surplus ($45 billion and counting).

Assemblyman Devon Mathis (R-Porterville) testified in person his support for suspension of the gas tax “on behalf of the one-half million people in rural California,” District 26.

Two odd calls with the same message even made it through the Assembly operator: “I’m a young person living in a climate catastrophe – I oppose the bill.”

However, as soon as testimony ended, Assemblyman Alex Lee (D-Palo Alto) proposed a set of amendments that would have fundamentally gutted Kiley’s bill. “We are fracking the hell out of the planet,” Lee said.

When Kiley objected to the vast amendments, committee Chairwoman Laura Friedman (D-Glendale) ordered Kiley’s microphone turned off, and told him he had to wait to hear Assemblyman Lee’s amendments.

Assemblyman Vince Fong (R-Bakersfield) made a motion to move the bill in print – Kiley’s bill as written – but the motion was killed by the committee on a 3-9 vote.

Chairwoman Friedman asked Lee if he had his proposed amendments in print. He did not. Lee was given time to produce the amendments, and the bill was held over until the committee could read the proposed amendments.

“Absolutely disgraceful,” Kiley said. “Absolutely disgraceful,” he directed at the committee.

When the amendments came back, Assemblyman Vince Fong unloaded. “Let’s be clear on what’s happening right now. This bill is being hijacked shockingly to raise taxes even more on energy – on a bill to suspend the gas tax.”

“This bill that was going to provide immediate gas tax relief, and this committee proposes increasing taxes,” Fong said. “Completely asinine. It makes completely no sense. So I am asking for a no vote on this bill, unfortunately.”

“Now this bill has been hijacked. That is completely unacceptable. Everyone should be ashamed with this process,” Fong added.

“I find it amazing that no one wants to hear the voices of Californians,” said Assemblywoman Laura Davies (R-Laguna Niguel). “We have almost $60 Billion in surplus – of your money.”

“Why don ‘t we have a debate on suspending the gas tax,” said Assemblywoman Janet Nguyen (R-Huntington Beach). “Let’s have a vote. Just vote on it. Vote no. This is why Californians hate our state government.”

Nguyen said a gallon of gas costs more than a gallon of milk, forcing hurting families to choose between milk and gas. “Putting more taxes on Californians is the wrong thing to do.”

Committee chairwoman Laura Friedman had a different take: “I guess I’m all shocked you are shocked by this.” She blamed the oil industry for “giant surcharges,” and “windfall profits.”

“Don’t tax that, and hope that it trickles down to the common people,” she said. “We leave it up to those corporations to decide. There is nothing that says they don’t just pocket that money.” She then said Lee’s amendments increasing taxes on energy actually go to addressing those oil industry “windfall profits.”

“Of course we could vote this down, but we are trying to help here,” Friedman said.

But California Democrats don’t want their “no” vote registered killing a bill to suspend the gas tax. And that’s what this is really about. Politics.

Kiley offered Friedman the opportunity to put her name on the newly amended bill if she liked it so much. She stammered and accused Kiley of cross-examining her, and then said she hadn’t had enough time to read the amendments.

“So here’s the difference — we have here two proposals. I’m willing to put my name on my proposal,” Kiley said. “We are willing to own our proposal; you aren’t willing to even put your name on yours.”

“Do you ever wonder why more people are leaving our state today than ever,” Kiley asked. “This used to be the state where anyone can get ahead. Now it’s the state people can’t wait to leave behind. The proceedings here today are a perfect example of that.”

Click here to read the full article at the California Globe

A $400 Gas Rebate May Be Ahead

Lawmakers’ proposal comes amid pressure to help Californians facing high prices.

SACRAMENTO — A group of Democratic state lawmakers on Wednesday called for sending a $400 rebate to every California taxpayer to help soften the blow of the recent surge in gasoline prices.

The proposal comes as pressure mounts to help Californians struggling with prices at the pump as well as increases in the costs of food, rent and other essentials. Republican lawmakers have been pushing to temporarily suspend the state’s highest-in-the-nation gas tax — 51 cents per gallon — but that appears unlikely because of opposition from Democratic legislative leadership.

“This proposed $400 rebate would cover the current 51 cents-per-gallon gas tax for one full year, 52 trips to the pump for most vehicles,” the lawmakers wrote in a letter to Gov. Gavin Newsom, Assembly Speaker Anthony Rendon (D-Lakewood) and Senate President Pro Tem Toni Atkins (D-San Diego).

“Notably, we believe a rebate is a better approach than suspending the gas tax — which would severely impact funding for important transportation projects and offers no guarantee that oil companies would pass on the savings to consumers,” said the letter, obtained by The Times on Wednesday.

The governor has been working with the Legislature to craft a tax relief package after promising in his State of the State address last week to put money “back in the pockets” of Californians who have been stung financially by the sharp rise in gas prices.

Newsom administration officials have said several ideas are under consideration, although suspending or reducing the state gas tax does not seem likely. Rendon and Atkins released a joint statement last week dousing the idea, saying it would not provide substantial assistance and could reduce funding for crucial road and bridge repairs statewide. Instead, they favored general tax relief to help Californians struggling with rising costs — not only for gas but for food, rent and other life essentials.

The proposal announced Wednesday came from a group of 10 Democrats — Assemblymembers Cottie Petrie-Norris of Laguna Beach, Cecilia Aguiar-Curry of Winters, Rebecca Bauer-Kahan of Orinda, Jesse Gabriel of Encino, Adam Gray of Merced, Jacqui Irwin of Thousand Oaks, Evan Low of Campbell, Blanca Rubio of Baldwin Park, Sharon Quirk-Silva of Fullerton and Carlos Villapudua of Stockton — and one independent, Assemblymember Chad Mayes of Yucca Valley.

Several of the lawmakers are generally viewed as business-aligned moderates in the Assembly Democratic caucus. They have scheduled a Thursday news conference to provide more details.

Republican leaders quickly threw their support behind the measure, though they still vowed to push for suspending the gas tax.

“This bill should be fast-tracked to the Governor’s desk and targeted to working Californians who actually feel the pain at the pump,” Assembly Republican Leader James Gallagher of Yuba City said in a statement Wednesday evening.

The proposal, the lawmakers said in their letter to Newsom, should be considered as part of the state budget negotiations that will begin in late spring. Early estimates of the size of California’s tax surplus have varied and won’t become more clear until after taxpayers file their returns by next month. Even so, most estimates have been far larger than the projected $9-billion cost of the Democratic effort.

Click here to read the full article at LA Times

Proposal From GOP Lawmakers Would Cut California Gas Tax For Six Months

Republican lawmakers gathered in Orange County on Wednesday to drum up support for a bill that would suspend California’s gas tax for six months, saving drivers 51 cents on every gallon they pump.

“Hardworking families are having to cut back from other expenses just to fill up their gas tanks,” State Sen. Pat Bates, R-Laguna Niguel, said during a press conference in Orange’s Yorba Park, held near a Mobil gas station.

“California residents deserve some financial relief,” Bates added. “A suspension of the gas tax will go a long way.”

Democratic leaders in the legislature so far have pushed back against efforts that would reduce the revenue the state gets from the gas tax. That money, the Democrats note, is key to paying for infrastructure improvements and other vital programs statewide.

But Assembly Bill 1638, introduced in January by Assemblyman Kevin Kiley, R-Sacramento, proposes using some of the state’s current budget surplus — which is estimated to be from $46.5 billion to $69.5 billion — to make up the $4.4 billion in revenue that would be lost during a six-month suspension of the gas tax.

“California can easily afford to reduce the burden of record high gas prices without taking money from road projects,” said Assemblywoman Laurie Davies, R-Laguna Niguel. “We don’t want to delay necessary maintenance, just help drivers afford to commute to work or bring their kids to school.”

The proposal comes as gas prices are soaring in California. As of Wednesday, March 2, the state average price is $4.87 a gallon according to AAA, or about a third higher than the national average of $3.66 a gallon. What’s more, gas prices — which are higher in California because of taxes and stricter environmental rules, among other things — are expected to increase even more as Russia’s war in Ukraine puts added pressure on already strained supplies.

The tax holiday also is being pitched during an election year, and the state GOP previously has used the gas tax as an issue to get rare wins against Democrats. In 2018, the party launched a successful recall of state Sen. Josh Newman, D-Fullerton, by isolating him as one of 81 state legislators who voted in 2017 to raise the gas tax. (Newman won back the seat in 2020.)

Assemblyman James Gallagher, R-Yuba City, who is Republican Leader in the Assembly, organized Wednesday’s press conference, which featured three GOP candidates in Orange County who expect to face competitive races in November.

Dan Schnur, a politics professor at USC and a long-time political strategist in California, said the tax holiday idea could be a tricky one for Democrats facing competitive races. While the idea of paying for infrastructure and road improvements with a gas tax — employing thousands of people in the process — has been popular with Democratic voters, Schnur believes any vote against the tax holiday could be used as fodder for mailers and attack ads by GOP opponents.

Davies, the Assembly member from Laguna Niguel, agrees, saying the GOP “will hold Democrats accountable” on the issue.

When asked Wednesday about the GOP proposal, State Sen. Dave Min, D-Irvine, signaled he’s open to the idea. Min, who’s not up for election until 2024, said he’s also tired of the “sky high” cost of living in California.

“Any legislation that helps ease the burden on taxpayers should be on the table and will have my full consideration,” Min said. “During a year of record budget surpluses, the state should be returning tax dollars back to Californians.”

A spokesperson for Assemblywoman Sharon Quirk-Silva, D-Fullerton, called the tax holiday idea “very interesting.” But the spokesperson also said Quirk-Silva’s office doesn’t yet have enough information to make an informed statement.

The gas tax holiday Republicans are proposing isn’t “radical,” Davies argued, noting that nationally even some Democrats are now calling for some version of relief.

Click here to read the full article at OC Register

California poised to have the highest gas tax in the country

On July 1, the excise tax on gasoline in California will go up 5.6 cents a gallon, enough to push the state’s total taxes and fees past Pennsylvania to become the highest in the nation.

The 5.6-cent increase represents the second iteration of Senate Bill 1, commonly called the gas tax, that was passed by the Legislature in Sacramento in the spring of 2017 and signed into law by then-Gov. Jerry Brown.

Under the terms of SB1, the tax increase comes in stages.

Drivers first experienced a 12-cent per gallon rise at the pump in November 2017. An additional 5.6 cents per gallon will be tacked on at the beginning of next month, which will boost the state’s total excise tax to 41.7 cents a gallon. …

Click here to read the full article from the San Diego Union-Tribune

California Gas Prices Climb 50 Cents in 1 Month Ahead of Gas Tax Increase Slated for Summer

Los Angeles County gas prices spiked again over the weekend, with the average price climbing about 10 cents a gallon to $3.88 as of Monday, the latest AAA figures show.

That’s higher than California’s statewide average of $3.80 for a gallon of regular unleaded, which also happens to be the most expensive of any state at the moment.

In one month, prices at the pump have soared in the Golden State, climbing from an average of $3.30 to $3.80, according to AAA.

L.A. County, meanwhile, has seen an even sharper spike, with the cost increasing by about 55 cents since March 8. …

Click here to read the full article from KTLA5

California Taxpayers Give Thanks But Worry About the Future

taxesIn this season of Thanksgiving, taxpayers in California have reason to pause when asked for what they are thankful. Considering the costly plans of the newly elected Legislature and governor, taxpayers may be most grateful for the fact that the state hasn’t yet built a wall encircling the state to keep them from leaving.

After 2017, when lawmakers enacted new taxes including a $5.2 billion annual tax hike on gasoline, diesel and vehicle registration, as well as a new tax on recorded documents, 2018 saw every effort by the Legislature to increase taxes defeated by advocates for taxpayers.

We are grateful that the first-ever tax on drinking water was defeated.

We are grateful that the tax on fireworks was defeated, and that the effort to revive the “snack tax” was not successful.

We are grateful that the proposal to put a sales tax on services was shelved.

We are grateful that nearly a million voters signed petitions to repeal the gas and car tax. Of course, the bad news is that the gas tax repeal was given a new title by Attorney General Xavier Becerra that removed the words “gas tax repeal” from the ballot, deceiving voters.

To read the entire column, please click here.

Rejection of Proposition 6 Doesn’t End the Taxpayer Revolt

Gas PricesIt is understandable that many California taxpayers are disappointed with the election results. The defeat of Proposition 6 means that last year’s big increases in both the car tax and the gas tax imposed on us by Sacramento politicians will remain in effect and California’s drivers are stuck having the second-highest gas tax in the nation.

Tax-and-spend progressives are interpreting the defeat of Prop. 6 as a green light to impose even higher taxes. In fact, some now believe that the iconic Proposition 13 itself may be vulnerable. But this thinking is faulty.

There are three major reasons why Proposition 6 failed and none of them are because voters were enamored with the Senate Bill 1 tax hike last year. First, the ballot label – which may have been the only thing low-information voters saw – made no reference to the tax hike passed by the legislature last year. Rather, it ominously stated that the initiative would “eliminate certain transportation funding.” This non-specific description ignores that, had Prop. 6 passed, California would still have the fifth-highest gas tax in the nation. In providing a blatantly misleading ballot title, Attorney General Xavier Becerra did the opponents a huge favor.

Second, the financial power of the “rent seekers” — those interests which secure financial advantage through higher taxes on the general public – was on full display during this campaign. Big business, including large construction companies, teamed with big labor to contribute well over $50 million in campaign funds. A one-time $50 million investment for $5 billion in tax proceeds every year is a heck of a good return on investment. Moreover, this amount of money dwarfed the approximately $5 million raised by the proponents. With that kind of spending disparity, the disinformation spewed out by the opponents could not be challenged effectively, particularly in major media markets.

Third, opponents engaged in repeated acts of questionable and even illegal behavior. Beyond just the over-the-top threats of collapsing bridges if Prop. 6 passed, there was the well-publicized use of Caltrans-supervised work crews to stop traffic and hand out campaign fliers urging a no vote on Proposition 6. And the full integration of Caltrans management with opposition campaign operatives was an example of real, not fake, collusion. While legal actions are pending on this kind of activity, it is of little solace to California drivers who are being punished every time they pull up to the pump or write a check to the DMV. …

To read the entire column, please click here.

California Voters Decide to Keep Democrats’ Gas Tax Increase

Gas-Pump-blue-generic+flippedAmong numerous measures that went before the state’s voters Tuesday, Californians rejected a proposal to repeal a gasoline tax increase that was passed by the Legislature to fund road and transportation projects. Proposition 6 failed Tuesday after Democrats campaigned to preserve $5 billion a year to fix roads and improve transit.

The state’s Republicans sought to repeal hikes in fuel taxes and vehicle fees that are expected to fund $52 billion in transportation projects over a decade. Their plan also would have required voter approval for future gas tax hikes.

GOP lawmakers argued that California has grown too expensive and tax dollars need to be spent more wisely. They hoped the measure would help drive Republican voter turnout in contested state and congressional races.

“It’s about whether working families will be given some breathing room and whether we can address the high cost of living in California,” Carl DeMaio, a former San Diego city councilman who led the effort, told the Mercury News. “That’s real money.”

Democrats and construction industry and union leaders maintained the revenues are vital to upgrade California’s crumbling roads and bridges. …

Click here to read the full article from Fox News