CALIFORNIA GAS REBATES MAY NOT ARRIVE UNTIL LATE SUMMER — OR LATER
Newsom, lawmakers haggling over how to process payments
After missing multiple self-imposed deadlines, Gov. Gavin Newsom and legislative leaders remain at odds over how to offer relief from California’s high gas prices — criticizing one another’s plans and prolonging an already lengthy process that stands in the way of residents’ cash payments.
Selecting a state agency to oversee the program is the latest point of contention, a decision that could determine how quickly people receive rebates.
The governor has warned against a legislative plan to leave the process to the state Franchise Tax Board, the agency that distributed state-issued pandemic relief checks. Instead, he has proposed hiring a third-party vendor to work with the California Department of Motor Vehicles in providing debit card payments to car owners, though lawmakers say they have little confidence in that approach and that refunds should not be given strictly to drivers.
“Our approach with the DMV was exclusively an approach of necessity because FTB can’t get these checks processed as they’re doing tax returns,” Newsom told the Los Angeles Times’ editorial board in late April.
With annual tax refund checks to distribute and even some pandemic relief payments still unsettled, the governor said relying on the Franchise Tax Board could delay new cash rebates until at least October.
As of April 22, at least 73,000 Californians were still waiting for checks totaling more than $50 million to alleviate the economic burden of the COVID-19 pandemic, according to the tax board. More than 20,000 of those checks were part of the state’s first round of pandemic relief and should have arrived last year, according to the state’s projected time frames.
But some lawmakers and anti-poverty advocates say the tax agency is preferable to creating a new program through the DMV.
“This is a huge state and setting up a new system and infrastructure inevitably takes longer than planned,
even with the best of intentions,” said Chris Hoene, executive director of the California Budget and Policy Center, a nonprofit group that advocates for low-income residents.
“There is a fundamental tension in the governor’s proposal that the administration has not resolved,” he said. “They want early action from the Legislature in order to deliver money to people more quickly, but they want to do so by trying out an untested new system.”
Concerns about the DMV are not new. In 2019, state auditors found “significant deficiencies” in its operations, citing long lines of customers due, in part, to outdated technology.
Newsom has since called for a systems overhaul of the department, with projects still under way.
To cope with rising inflation, legislative leaders unveiled a plan in mid-March to send at least $200 to taxpayers with joint tax returns showing an adjusted income of less than $250,000 — regardless of whether they own a car. Newsom followed days later with the details of his own plan to give at least $400 to every registered vehicle owner in California, focusing on gas prices.
In California, the average price for a gallon of regular was $5.85 on Thursday, which was $1.43 higher than the national average.
Republicans favor temporarily suspending the state’s gas tax, which at 51.1 cents per gallon is the second-highest in the nation.
But Newsom and Democratic leaders have rejected that plan, arguing it’s better to tap into the state’s hefty budget surplus to send relief directly to taxpayers.
A key issue is what limits, if any, will be placed on eligibility.
Senate President Pro Tem Toni Atkins, D-San Diego, said the eventual plan needs to be focused on helping Californians who need it the most — a goal that isn’t likely to be met by focusing on vehicles.
“That plan leaves out non-car owners — the poor, the elderly, the environmentally conscious,” she said in a statement. “All Californians are impacted by the growing costs of consumer goods and are deserving of relief.”
Newsom’s original plan to focus on vehicle owners would exclude drivers whose registrations are not valid — a policy that anti-poverty advocates say would leave out people who are behind on DMV fees and could use the cash the most.
H.D. Palmer, a spokesperson for the California Department of Finance, pointed to $750 million in Newsom’s proposal that would offer Californians free public transit fares for three months in response to equity concerns.
The governor set a goal of signing off on gas rebates before he introduced his revised budget, which is scheduled to take place today, with the hope of getting payments out the door as early as July.
But Anthony York, senior communications adviser to the governor, said that an agreement would likely be delayed until lawmakers and the governor reach a budget deal next month.
Under that revised timeline, the first payments in Newsom’s plan would not be sent until September at the earliest.
“The governor wanted early action, but clearly the Legislature and the administration have a difference of opinion about the best way to provide relief to Californians, and it now looks like that’s going to be wrapped into the larger budget negotiations,” York said.
Separately, Newsom’s revised budget proposal set to be unveiled today includes a big funding boost for California’s three systems of public higher education. In exchange, the systems will need to meet comprehensive targets to improve access, affordability and equity.
The proposal for the University of California, California State University and California Community Colleges sets out the most detailed numerical goals ever included as conditions of state funding under agreements reached by Newsom and the three systems.
The ambitious goals include increasing graduation rates, closing achievement gaps, adding more UC and CSU seats for Californians, boosting financial aid, lowering debt, reducing the cost of college attendance and producing more graduates in high-demand fields, such as teaching and science, technology, engineering and mathematics.
For the first time, the three systems will submit reports to the governor and Legislature each November on their progress in meeting the goals. Those reports will help shape the next budget cycle. If the systems fall short, their funding could be reduced in the following fiscal year — or resources could be added to overcome identified obstacles.
Newsom’s team has laid out more strategic goals and the promise of more funding to meet them — a 5 percent base general fund increase in each of the next five years.