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

Comments

  1. Since when is a single person earning $125K a year “wealthy” in California, where the net takehome after Federal and State taxes is about $75K, property taxes take another chunk and mortgage payments use up a lot of what’s left? “Wealthy” is the 189 billionaires living in this State.

    • Stan Sexton says

      There’s more Billionaires here than 189. Covid concentrated the wealth everywhere and made at least 8 Big Pharma Execs Billionaires. Many have 2nd homes here as well.

  2. CA Dems would never call a State gas tax/fee holiday because it would alert the little people how much they are being ripped off.

  3. *Laugh*

    You have to give it to them, they don’t care as long as it toes the party line.

    Think about the a) mailing of debit cards, b) printing of debit cards, c) figuring out who earns too much to get a card, and d) the staff costs to create, massage, and then mail Newsom’s stupidity.

    Le’ts see; 1 bill to suspend the tax costs a) the ink to sign it, b) the cost of the one page to print it, and c) the news conference to announce it. Maybe $1,000……….

    But then again who cares? Most certainly not the Radical Leftest Party (aka Democrats)

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