Lawmakers Pass a Budget, But No Deal Yet on Gas Relief

On Monday, Senate and Assembly Democrats passed their version of the 2022-23 state budget.

While patting themselves on the back for adopting “a budget that puts California’s wealth to work for individuals, families, and businesses throughout our state,” there was one thing missing from their announcement – the support of Gov. Newsom.

Newsom and legislative Democrats are still at odds over how to give Californians some relief in the state budget from record-high gas prices and inflation.

Keep in mind that Monday’s vote was about lawmakers meeting voter-approved requirements that they pass a budget – ANY budget bill – by June 15 to keep receiving their paychecks.

Publicly for now, everyone is making nice.  Senate President pro Tem Toni Atkins and Assembly Speaker Anthony Rendon released a statement on Monday saying “we look forward to working with the Governor in the coming days to ensure we have a responsible budget in place for the start of the fiscal year that delivers prosperity and strengthens the future.”

Senate Budget Committee chair Nancy Skinner, D-Berkeley, told Calmatters “the Legislature is more than 95% in agreement with Newsom.”  Newsom, Atkins, and Rendon literally smiled for the cameras in a photo of their budget discussions tweeted out on Tuesday.

Behind closed doors, Newsom continues to press for his $11.5 billion May Revise plan to give rebates to car owners – $400 per car, for a maximum of $800.  Legislative Democrats want to give out $8 billion in rebates, $200 per taxpayer, limited to those earning under $125,000 a year for individuals and $250,000 for couples filing jointly.

One of the disputes is over how fast Californians would get relief under the competing plans.

As the Sacramento Bee reports, Department of Finance official Erica Li told lawmakers that “while the legislature’s budget includes a very important relief proposal to address these rising costs, as it’s currently structured, it will take longer to implement the smaller $8 billion and will not reach as many Californians when compared to the governor’s $11.5 billion proposal.”

Newsom’s senior advisor for communications Anthony York told Calmatters that Newsom also “remains opposed to massive ongoing spending” in the Legislative Democrat plan, which is ironic given the administration’s proposal for a record $300 billion state budget.

So far, no one is blinking.

Lawmakers and the Governor are likely testing one another’s resolve to see who will give in first.  If history is a judge, the Legislature will ultimately cave.

In 2011, then-Gov. Jerry Brown vetoed a budget that the Legislature’s Democrat majority sent him on a majority vote calling it “unbalanced.”  As the Los Angeles Times reported at the time, “Democratic lawmakers had knowingly flirted with the possibility of a veto by stuffing their plan with the very things that Brown promised he would never sign.”

Brown exercised gubernatorial supremacy and largely dominated every future budget.  Newsom, too, has dominated his first three state budgets.

In an election year, legislative Democrats are now testing the limits of how far they can push Newsom in other areas to get what he wants – delivering immediate relief to struggling Californians.  While he will likely not veto the budget – or even issue a veto threat – his continued resistance to the plans put forward by Atkins and Rendon is further proof that the governor ultimately carries the upper hand in budget negotiations.

While Newsom wants a gas tax relief deal soon, expect the discussions over this and other thorny budget issues to drag into the summer.  Newsom and Legislative Democrats can reach a deal on a companion budget bill with changes to the main budget bill in order to win his signature by June 30, while punting the thorny issues for further discussion.

Click here to read the full article in the Pacific Research Institute

California Tops Nation’s Highest Gas Prices at $6.43 Per Gallon

California is once again at the top of the charts, leading the nation in… wait for it… gas and diesel prices.

AAA reports today’s national average of $5.014 per gallon — California comes in at a cool $6.436 per gallon for Regular, and nearly $7.00 per gallon for Diesel.

California’s prices greatly top the national averages: The average for a gallon of regular gas in California is $6.436 per gallon, and a gallon of diesel is $6.991.

The Globe just took the photo above Monday June 13, 2022 at a Chevron gas station in Sacramento, CA.

With Regular at $6.79 and Diesel at $7.39, California’s gas prices are much higher than the state average and even higher than Hawaii and Alaska.

The Wall Street Journal reported Monday:

“California, Oregon and Washington have traditionally had higher fuel costs than the national average due to a lack of refineries and pipelines that can pump in domestic oil, said Patrick De Haan, head of petroleum analysis at price tracker GasBuddy. These states have to pay higher prices to ship in oil, much of it from abroad, which then gets passed down to the consumer, he said.”

AAA reports that Georgia drivers are paying on average $4.484 per gallon of gas – the lowest in the country.

Florida drivers are paying $4.891 per gallon of gas.

Indiana drivers are paying $5.221 per gallon of gas.

Tennessee drivers are paying $4.642 per gallon of gas.

Mississippi drivers are paying $4.524 per gallon of gas.

Texas drivers are paying $4.664 per gallon of gas.

California drivers are paying $6.436 per gallon of gas.

The Wall Street Journal noted that “states along the Gulf Coast, including Texas and Louisiana, are among the states with the cheapest gas because of the abundance of fuel refineries, pipelines and domestic sources of oil in the region.”

Click here to read the full article in the California Globe

Californians Deserve Relief From High Gas Prices: Michelle Steel

With the official start of summer just weeks away, families are getting ready to pack up the car and hit the road, visiting places like our beautiful Orange County beaches and our world class theme parks.

It’s estimated that the average family spends 23 hours on summer road trips. But this year during their travels, families are being hit with some of the highest gas prices they’ve ever seen. In fact, Californians are paying the highest gas prices in the country. The average price for a gallon of gas in our state – about $6.40 – has gone up more than 30% in the last year.

In some places across Southern California, gas is more than $7 a gallon. After months of higher prices at the pump, you don’t need to read national news headlines to know that people are fed up.

Included in the $6.40 gallon of gas is nearly $1.20 in taxes and fees, 51 cents of which is the state’s gas tax. This year the state of California has a budget surplus of almost $100 billion, thanks to state Democrats having collected an extra $55 billion in taxes. Those dollars belong in your pocket, not Gov. Gavin Newsom’s.

Despite bipartisan calls in Congress for Newsom to suspend the tax, and state lawmakers’ opportunity to provide relief for California families, nothing has been done to alleviate these skyrocketing costs. Instead, in just a few weeks on July 1, the gas tax is going to increase to 54 cents a gallon. This is on top of record-high inflation, which is costing the average American household an extra $5,200 this year. It’s time to repeal the state gas tax entirely and begin providing relief to hard-working Californians.

Inflation is just another tax on every American, and in California we already pay some of the highest taxes in the entire country. Repealing this tax could save families up to $10 every time they visit a gas station. But this tax repeal, though helpful, would ultimately be a band aid on a much bigger issue.

The reality is that the United States and California could be strong leaders in the energy independence movement, but liberal policies are holding us back and American families are the ones paying the price. The U.S. is the largest oil producing country in the world, responsible for almost 20% of worldwide crude oil production.

We have the resources and the tools to produce our own supply. Instead, we’re reliant on markets run by dictators like Vladimir Putin and Nicolás Maduro. The United States cannot be a leader on the world stage while beholden to foreign dictators’ oil.

Major U.S. refineries are shutting down while the Biden Administration moves further away from oil and gas production, completely halting new oil and gas leasing on federal lands.

40 years ago, California produced 61% of the oil that the state consumed. By 2019 that number had fallen by half, and now the state imports 37% of its oil from Saudi Arabia. We also receive major imports from Iraq. Shockingly, we produce less than 1% of the oil used within our state.

We have the resources right here at home to bring down costs and produce energy to supply our needs. President Biden and national Democrats have been leading the charge to close U.S. refineries by creating stricter regulations that are fueling the crisis we see today. California and the U.S. should use their state-of-the-art technology to be leaders in oil refining.

Unfortunately, the U.S. only has 18% of the world’s refineries, this hurts our economy in many ways, these are high skilled, high paying jobs that could be in California.

Click here to read the full article in the OC Register

Gas Hit $8.05 a gallon at Station in L.A.

At a site known for extreme pricing, more stopped for sodas or snapshots than fuel.

Marvis Joy thought it was bad enough that the gas he was pumping into his Jeep Wrangler cost $7.85 for a gallon of regular. But he was taken aback when he heard how much that same gallon cost at that same downtown Los Angeles Chevron station just two days earlier.

A dizzying $8.05.

“You’ve got to be kidding me,” Joy said Thursday morning, noting that you’d never see such an outrage in his hometown of St. Louis.

“People get upset with prices in St. Louis when they get over $4,” he said. And he left the gas station with a message: “These prices need to go down, that’s all I’m saying.”

The gas station at Alameda Street and East Cesar Chavez Avenue is infamous for its sky-high prices. But it’s also a sign of the times, of gas prices that have been steadily rising yet again.

The average price for a gallon of regular gas in California Thursday was $6.213, according to the American Automobile Assn. The price in Los Angeles County was $6.221. Compare that to June 2021, when the average price in California was $4.204, and in L.A. County, $4.07.

Rural California is being hit even harder than Los Angeles. As of Thursday, Mono County’s average was $7.054, almost a full dollar more than the state average.

Nationwide, a gallon of regular cost on average $4.715 Thursday, up from $3.041 a year earlier.

There are many reasons why California has higher average gas prices, from more stringent clean energy regulations to inflation and other factors. Russia’s war against Ukraine has caused the international market to terminate relationships with Russian oil companies, shrinking the global supply.

Douglas Shupe, Southern California representative for AAA, said the state of gas prices throughout the rest of the summer is unpredictable and entirely dependent on the war.

He said he understands people’s surprise when they saw the Chevron station earlier this week. He got out of his car to take a picture of the $8.05 sign.

Though the prices at the station dropped back down to $7.85 per gallon by Wednesday morning, the climb above $8 was alarming to many L.A. residents. Chevron workers there declined to comment.

Most people who drove into the gas station midday Wednesday merely stopped for a soda, some cigarettes or a bag of chips, then made their way back onto the road. Only a handful of customers seemed unfazed enough by the rising prices to stop and fill up at the pump.

One of them, Los Angeles resident and L.A. Metro employee Suresh Narola, said he filled up his Chevy there out of necessity, not desire.

“This is the most expensive place in the city. I only fill up my tank here when it’s an emergency,” he said. “I work right around here, so sometimes it’s convenient.”

With a quick search, AAA’s Shupe said, he found multiple gas stations in the L.A. area well below the county average. He urges other customers to do the same.

“Our message to our customers is to not go to these gas stations with incredibly high prices out of habit, and to try to shop around,” he said.

He said the $8.05 price is not terribly surprising for that specific gas station; people in the area say it is notorious for its prices, even prior to the pandemic.

Many customers at the station Wednesday were visiting Los Angeles. There was the government worker from the Bay Area who wasn’t worried about prices because his employer was picking up the tab; one woman from Lebanon said she endured far higher prices in her home country; one Canadian man on vacation pointed out that the price of cheap gas is a factor in the growing issue of climate change.

Click here to read the full article in the LA Times

At $6.09 a Gallon, Los Angeles Pays Record Gas Price Over US Average

Los Angeles drivers know they pay more for gasoline than the average US driver: It’s the price for cleaner air in a state that’s made being green part of its DNA.

What motorists in LA — a city famed for its car culture — may not realize is that the amount they pay over the national average soared to more than $1.80 a gallon in late March, the widest in at least 10 years, according to data from the AAA.

So far, at least, the cash squeeze at the pump isn’t crimping travel plans, even though each tank costs about $24 more. The Auto Club of Southern California predicts 2.6 million local residents will take to the highways this Memorial Day weekend. That’s up 5% from 2021 but about 7% below 2019, before the Covid-19 pandemic.

The cause for the spike in prices earlier this year was refinery outages, according to Patrick De Haan, head of petroleum analysis at GasBuddy, which tracks prices at 150,000 US gas stations.

While the local refinery issues have largely been resolved, prices nationally have kept on climbing. Regular gasoline rose to $6.09 a gallon in LA this week, according to the AAA, still almost $1.50 more than the national average of around $4.60.

The higher prices in California are partly the result of taxes and state programs to reduce greenhouse gases, like a rule requiring a less-polluting blend of fuel. These measures add about $1.30 to the cost of a gallon, according to the Western States Petroleum Association, a trade group.

California also imports both oil and refined products, which must be trucked in or brought by tanker.

“We don’t have pipelines coming in from Texas and other parts of the country,” said Kevin Slagle, a spokesman for the oil group. “We have to ship it in from around the world.”

Prices, including the extra amount LA drivers pay, could spike again in the summer when travel picks up and a planned increase in the state tax is due to take effect. At the same time, a Chevron Corp. refinery in the state is scheduled for maintenance, and a South Korean refinery that supplies the US West Coast had some units offline after a fire.

To offer drivers some relief, Governor Gavin Newsom, a Democrat who’s running for re-election this year, has proposed an $11 billion package that includes $400 refunds to personal car and truck owners, with a maximum of $800 for up to two vehicles.

Click here to read the full article in the Mercury News

Newsom: Gas Rebate Would Be Delayed Until October Under Legislature Plan

Governor touts DMV as quickest alternative to getting money back

After a flurry of proposals from Sacramento in March to send money back to Californians, a rebate check could still be nearly five months away under plans promoted by legislative leaders, Gov. Gavin Newsom warned, as he argued that his contentious plan linking financial relief to car ownership is the quickest alternative to landing money back in wallets.

In a recent interview with the Bay Area News Group editorial board, Newsom criticized California’s Democratic leadership for outlining a plan that would funnel $8 billion through the Franchise Tax Board, which he said could add months to the refund timeline. Under that proposal, taxpayers making up to $125,000 would see $200 checks with an additional $200 for each child or other dependent.

“FTB can’t get the money out quickly, because they’re in the middle of tax refund season,” Newsom said, adding that refunds would start in late September and could span all the way into next spring. “My sense was, people may get a little cranky about that. They may want a little quicker relief.”

The wrangling between Democrats — who hold a supermajority in the legislature — over how to give Californians relief at the gas pump has dragged on for weeks as gas prices have remained well over $5 a gallon for the past two months. Democratic leadership and the governor remain at loggerheads over whether the money should be going to all residents at all income levels, as Newsom has proposed, or be targeted toward people in greater need.

Newsom has proposed $400 for each vehicle Californians own, capped at $800 for two vehicles, totaling $11 billion in rebates. Under Newsom’s plan, the Department of Motor Vehicles — not the Franchise Tax Board — would be responsible for distributing debit cards that could start hitting mailboxes “earlier in the summer,” the governor said.

Newsom said the two-vehicle rebate cap would prevent “people with 23 Teslas” from exploiting the state’s generosity. But Newsom said that this rebate should include higher-income earners who were left out of the previous stimulus check that was limited to people earning $75,000 or less.

“We want to acknowledge that the middle class felt a little left out of the last one,” said Newsom.

The governor has also called for public transit grants as part of his proposal to allow transit agencies to provide free rides for three months.

Negotiations between key legislators and the governor are taking place ahead of a highly-anticipated May budget revision out next week. The revision will provide an updated picture of how much money the state has and how Newsom wants to spend it before all parties need to finalize a budget in June.

According to the latest figures, the Golden State is now estimated to have a booming $68 billion surplus. A 1979 spending cap requires Sacramento to send some of this money back to taxpayers or spend it on select categories, including education and infrastructure.

A Valero gas station in Sacramento on March 10, 2022. (Miguel Gutierrez Jr., CalMatters)
A Valero gas station in Sacramento on March 10, 2022. (Miguel Gutierrez Jr., CalMatters) 

In a short statement to the Bay Area News Group, Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon said they are working to provide taxpayers with speedy financial relief, although they did not directly address Newsom’s criticism.

“We have been clear from the first conversations on this issue that the Legislature wants to help as many people as we can, as quickly as possible,” the Democratic leaders said.

Scott Graves, research director at the California Budget & Policy Center, an organization advocating for low-income residents, said Newsom should not look to the DMV’s cumbersome bureaucracy when the state already relied on the Franchise Tax Board to target billions of dollars in relief payments to families.

“Let’s not reinvent the wheel,” said Graves. “Let’s use a proven pathway that we already used last year to efficiently get money out the door to Californians who really need it.”

The average price for a gallon of regular in California topped $5.76 on Thursday and was even higher in the Bay Area. Regardless of gas relief checks, drivers should expect to pay around 3 cents more per gallon come July 1 due to an inflationary increase to the gas tax that is currently pegged at 51 cents a gallon. Newsom had sought to pause the increase, but the legislature failed to meet a deadline last week to do so.

Click here to read the full article at the Mercury News

US Inflation Jumped 8.5% In Past Year, Highest Since 1981

WASHINGTON (AP) — Inflation soared over the past year at its fastest pace in more than 40 years, with costs for food, gasoline, housing and other necessities squeezing American consumers and wiping out the pay raises that many people have received.

The Labor Department said Tuesday that its consumer price index jumped 8.5% in March from 12 months earlier, the sharpest year-over-year increase since 1981. Prices have been driven up by bottlenecked supply chains, robust consumer demand and disruptions to global food and energy markets worsened by Russia’s war against Ukraine. From February to March, inflation rose 1.2%, the biggest month-to-month jump since 2005. Gasoline prices drove more than half that increase.

Across the economy, the year-over-year price spikes were widespread. Gasoline prices rocketed 48% in the past 12 months. Used car prices have soared 35%, though they actually fell in February and March. Bedroom furniture is up 14.7%, men’s suits and coats 14.5%. Grocery prices have jumped 10%, including 18% increases for both bacon and oranges.

Investors focused on a bright spot in the report and sent stock prices up: So-called core inflation, which excludes volatile food and energy prices, rose just 0.3% from February to March, the smallest monthly rise since September. Over the past year, though, core prices are up 6.5%, the most since 1982.

“The inflation fire is still out of control,” said Christopher Rupkey, chief economist at the research firm FWDBONDS LLC.

The March inflation numbers were the first to fully capture the surge in gasoline prices that followed Russia’s invasion of Ukraine on Feb. 24. Moscow’s attacks have triggered far-reaching Western sanctions against the Russian economy and disrupted food and energy markets. According to AAA, the average price of a gallon of gasoline — $4.10 — is up 43% from a year ago, though it’s dipped in the past couple of weeks.

The acceleration of inflation has occurred against the backdrop of a booming job market and a solid overall economy. In March, employers adding a robust 431,000 jobs — the 11th straight month in which they’ve added at least 400,000. For 2021, they added 6.7 million jobs, the most in any year on record. In addition, job openings are near record highs, layoffs are at their lowest point since 1968 and the unemployment rate is just above a half-century low.

The escalation of energy prices, a potential threat to the economy’s long-term durability, has led to higher transportation costs for the shipment of goods across the economy, which, in turn, has contributed to higher prices for consumers. The squeeze is being felt particularly hard at the gas pump.

“That’s an extra dollar per gallon that I’m paying to get into the city to work,” Jason Emerson of Oakland, California, said as he loaded groceries into his car. “And then, you know, we have the tolls that just went up this past year a dollar. My eggs are a dollar more as well. So everything’s going up at least a dollar, which, you know, adds up.’

The latest inflation numbers solidify expectations that the Federal Reserve will raise interest rates aggressively in the coming months to try to slow borrowing and spending and tame inflation.

Kathy Bostjancic, an economist at Oxford Economics, said she expects year-over-year inflation to hit 9% in May and then begin “a slow descent.” Some other economists, too, suggest that inflation is at or near its peak. With federal stimulus aid having expired, consumer demand could flag as wages fall behind inflation, households drain more of their savings and the Fed sharply raises rates, all of which could combine to slow inflation.

But that could take time. Robust spending, steady pay raises and chronic supply shortages are still fueling inflation. In addition, housing costs, which make up about a third of the consumer price index, have escalated, a trend that seems unlikely to reverse anytime soon.

Economists note that as the economy has emerged from the depths of the pandemic, consumers have been gradually broadening their spending beyond goods to include more services. A result is that high inflation, which at first had reflected mainly a shortage of goods — from cars and furniture to electronics and sports equipment — has been emerging in services, too, like travel, health care and entertainment. Airline fares, for instance, have soared an average of nearly 24% in the past 12 months. The average cost of a hotel room is up 29%

The expected fast pace of the Fed’s rate increases will make loans sharply more expensive for consumers and businesses. Mortgage rates, in particular, though not directly influenced by the Fed, have rocketed higher in recent weeks, making home buying costlier. Many economists say they worry that the Fed has waited too long to begin raising rates and might end up acting so aggressively as to trigger a recession.

The American public’s expectation for inflation over the next 12 months has reached its highest point — 6.6% — in a survey the Federal Reserve Bank of New York has conducted since 2013. Once public expectations for inflation rise, they can be self-fulfilling: Workers typically demand higher pay to offset their expectations for price increases. Businesses, in turn, raise prices to cover their higher labor costs. This can set off a wage-price spiral, something the nation last endured in the late 1960s and 1970s.

Click here to read the full article at the Mercury News

The Long Beach Area Republicans Stand Tall for Energy Independence 

As you’re driving down the street, it’s hard to overlook the signs at the gas station featuring prices that are lighting up like a Las Vegas slot machine on a good night. It’s no secret that California is home to some of the highest gas prices in the nation with a state average around $5.72, hovering well above the national average. 

While some may argue that gas prices in California have always been relatively high, the reality is we didn’t wind up in this situation by mistake. Over the past two years, federal officials in Washington have taken deliberate and calculated moves to cripple our once-thriving American energy industry.

From the political slow playing of new oil and gas leasing on federal land to revoking the key permits for major energy projects like the Keystone XL Pipeline, a project that was going to be powered by renewable energy and have net-zero emissions across its operations, decisions like these have led us to where we are today. 

Couple these types of choices with the ongoing war in Ukraine, it can spell real trouble for not only the American energy market, but the international market and particularly that of our European allies as well. 

For decades, our international energy trade was dominated by the likes of unfriendly regimes in Russia, Venezuela, and Saudi Arabia, causing the US and our allies to rely on foreign foes to provide us with the necessary resources to keep our world and economy moving. But we have the opportunity to change that by investing further in American energy development. 

The impacts of high energy prices won’t only be pain at the pump. Soon it has the potential to increase the cost of almost all consumer goods. We can rewrite this narrative and it starts by working alongside our American energy industry to restart the responsible, sustainable, and safe operations needed to access the vast reserves of oil and natural gas that lie right below our feet.

A crucial first step in this is opening the sale of oil and gas leases on federal land. 

While Biden Administration officials like to stand at the podium and argue that there are 9,000 outstanding leases available – a misguided figure they repeatedly state – they’re neglecting the fact that these leases only represent a small fraction of the 37,496 leases that are actively being used. Furthermore, they continue to act as a roadblock in the issuing of new federal leases: 4,621 applications are currently being held up by bureaucratic red tape with another 2,200 of them being litigated in court.

You may ask yourself, why is this important? The reason is that not all leases yield oil or natural gas and they do expire. Having a stockpile of new leases allows for the continuous production of oil and gas – something that is more critical today than ever before. 

When the American energy industry is thriving, not only is our world a safer place, but it is cleaner as well. The United States energy industry operates under some of the most environmentally responsible standards anywhere in the world. Couple these high standards with cutting edge advancements in technologies and the industry has been able to drive down the emissions related to natural gas and oil production by 60%.

Demand for oil and natural gas isn’t going anywhere anytime soon. If we want to help alleviate the financial strain caused by high energy prices and make America energy independent, we need to provide our energy companies with access to the resources needed to do so.  

The Long Beach Area Republicans 

A $400 Tax Rebate To Offset California’s High Gas Prices? Here’s How It Would Work

A proposed $400 tax rebate to help Californians deal with high gas prices draws support, but don’t expect to see any checks in the mail next week.

SACRAMENTO — A group of Democratic state lawmakers on Thursday proposed sending every California taxpayer a $400 tax rebate check to reduce the financial pain they’re suffering because of gas prices and the rising costs of everyday goods.

But it’s by no means a done deal, so don’t expect to see any checks in the mail next week.

Here’s what is known so far:

Who would receive tax rebates and when would they be sent out?

All Californians who pay state income taxes would receive a $400 rebate, regardless of their income. So, in theory, billionaire Facebook co-founder Mark Zuckerberg and the manager of your local In-N-Out would both receive a rebate of $400. Because the payments would be sent to each individual taxpayer, married couples would receive $800.

Assemblymember Cottie Petrie-Norris (D-Irvine) said the rebates should be sent out as soon as possible and that the state should not wait until the Legislature and Gov. Gavin Newsom agree on the entire state budget, which is traditionally completed in late June.

“Our goal is to be able to do this in the spring, and all the folks here are going to be pushing really, really hard to make that happen,” Petrie-Norris said at a news conference Thursday outside the state Capitol.

Petrie-Norris said the intent of the group of Democratic lawmakers — which included moderate legislators — was to provide as much relief as possible to as many Californians as possible. But she acknowledged that decisions about who would receive a rebate and how much they would get will be hashed out in negotiations with the legislative leadership and the governor.

Assembly Republican Leader James Gallagher of Yuba City said he supports the proposed tax rebates, especially since the Newsom administration expects a $45-billion budget surplus. Gallagher wants to suspend the state gas tax as well.

“There’s an urgent need right now with the high costs across the board, not just gas, but all of our daily living costs have increased. People need relief now,” Gallagher said.

Why $400?

Petrie-Norris said the $400 tax rebate figure was used because it equals the amount a typical Californian pays in state excise taxes on gasoline per year. She said California drivers on average fill up their gas tanks 52 times a year. California’s highest-in-the-nation gas tax is 51 cents per gallon.

“That’s a yearlong gas tax holiday,” she said.

Why not just cut the state gas tax?

Republican lawmakers are pushing for a six-month suspension of the state gas tax, arguing that it would be the most effective way to provide direct financial relief to Californians reeling from high gas prices.

“The thing about a gas tax suspension is that it is naturally targeted at folks who are feeling the pain,” said Assemblymember Kevin Kiley (R-Rocklin). “People who are driving the most because let’s say they live in a rural area, or maybe they have to commute a long distance to work, or maybe they have several kids they have to drive to school, the benefit will be commensurate with the pain that they’re feeling right now.”

Kiley’s bill to suspend the gas tax failed in the Democratic-controlled state Assembly on Monday, though the lawmaker said he plans to force another vote on the proposal next week.

Assembly Speaker Anthony Rendon (D-Lakewood) and Senate Pro Tem Toni Atkins (D-San Diego) have said cutting the gas tax would endanger critical repair work being done on California’s crumbling roads, bridges and other essential transportation projects. They also said it would not provide substantial financial assistance to Californians.

Both the governor and Democratic lawmakers also said there’s no guarantee that oil companies would lower gas prices if the tax is suspended, warning that the companies might pocket the savings instead of passing them along to drivers at the pump.

Kiley dismissed that as political gamesmanship. He noted that Democratic Gov. Ned Lamont of Connecticut called on lawmakers in his state to suspend one of two taxes on gasoline by 25 cents per gallon until the end of June. Kiley also noted that the nonpartisan Legislative Analyst’s Office said in a February report that cutting California’s gas tax would save drivers money when filling up.

“Available evidence suggests that lower excise taxes likely would result in lower retail prices. The exact effect on retail prices is uncertain, but most of the change in the tax rate likely would be passed through to prices at the pump,” the report stated.

What are the odds that a $400 tax rebate will pass?

It’s clear that the governor and both Democratic and Republican leaders in the Legislature want to provide tax relief to Californians hit hard by high gas prices as well as increasing costs for food, housing and other daily needs. Because of the give-and-take of most spending negotiations in Sacramento, however, the odds of the $400 tax rebate proposal passing as is are not high.

Newsom and the Legislature’s Democratic leadership continue to negotiate over the best ways to help alleviate the financial pain at the gas pump, and some of the ideas that have been discussed include sending tax rebates to Californians with registered cars and sending out stimulus checks. In his January budget proposal, Newsom called for canceling an increase in California’s gas tax scheduled for July, indicating that he’s not completely opposed to tinkering with the state’s fuel taxes.

Click here to read the full article at the San Diego Union Tribune

Working Californians Hit Hard By Gasoline Prices

A recent column in this space was headlined “Inflation, the cruelest tax.” Well, if inflation is the cruelest tax, then inflation’s impact on gasoline, combined with the nation’s highest tax, can only be characterized as “cruel and unusual punishment.”

In addition to inflation and taxes, other government policies related to petroleum are counterproductive. These include regulatory burdens and open hostility to the entire petroleum industry currently on display in both Washington and Sacramento. All this adds up to a lot of unnecessary pain being inflicted on the middle class and working poor.

But now, progressive politicians are looking at poll numbers with alarm as they discover that most Americans believe the nation is on the wrong track, due in large part to feckless and incompetent leadership. Rather than fix the problems, however, the reaction of both the Biden and Newsom administrations has been to deflect blame.

A couple of months ago, the Biden administration blamed rising fuel costs on supply chain issues. Then, returning to an old excuse resurrected when the need arises, the blame shifts to the “greedy oil companies.”

But even the most artful political spin is unlikely to change the public’s understanding of who is at fault. Republicans are replaying the video clip on a constant loop where Biden stated unequivocally, “No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill, period.” Moreover, the attempt to blame the war in Ukraine is especially easy to expose as unfounded. Gas prices were already at record levels before the hostilities began.

In California, Gov. Newsom is attempting to blunt the political backlash by promising some sort of rebate to taxpayers out of the state’s massive surplus. But any notion that he would do so out of the goodness of his heart would be in error. Taxpayer advocates in 1979 sponsored the Gann Spending Limit which voters overwhelming approved. It is the Gann Limit, not Newsom’s benevolence, that might afford some relief for California drivers filling up their tanks.

If skepticism among voters when it comes to energy policy is high nationally, it is even more so in California due to the long history of misspending and gas tax proceeds. For example, in 1990, voters were told that California’s roads, freeways and bridges were crumbling and that spending on transportation was so seriously inadequate that a gas tax increase was desperately needed to save California from ruin. Fast forward to 2017 with the infamous passage of Senate Bill 1, a massive tax increase of another 12 cents per gallon on gasoline, an additional 20 cents per gallon on diesel fuel and a sharp increase in the cost of vehicle registration.

Voter anger at high gas prices might be less intense if they believed they were getting good value in the form of well-maintained roads and highways. But California consistently ranks in the bottom ten of all states in highway maintenance despite having the highest gas tax.

Our political leaders claim that the pain we’re feeling is because addressing climate change is our highest priority. But many of the restrictions they impose are counterproductive to environmental well-being. For example, rather than encourage drilling in North America, we are increasingly reliant on oil shipped from overseas, including from despotic regimes. But oil tankers run on massive diesel engines and foul our ports. How does that help address climate change?

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