Governor revving up his gas tax refund plan
SACRAMENTO — Gov. Gavin Newsom took a victory lap Friday as he touted his proposal to use California’s record surplus to provide residents relief from high inflation — the centerpiece being his proposal to send $400 gas tax refunds to vehicle owners.
But that focal point is far from a done deal. His approach continues to draw the side-eye from many Democratic state lawmakers, who say the refund push is shortsighted.
“There are better, more targeted uses for those struggling the most & deeper investments in schools & infrastructure,” tweeted Assembly Member Matt Haney, D-San Francisco, who doesn’t have a car and uses Amtrak to commute to Sacramento.
He added, “If we are going to give the money, let’s give the money regardless of a vehicle.”
Newsom, nevertheless, doubled down on rebates for drivers as he outlined how he wants to spend the state’s $97.5 billion operating budget surplus. He has called for using about $9.5 billion of that money to send refunds.
Legislative leaders have repeatedly rejected the idea and instead want to send payments to
lower- and middle-income tax filers, regardless of whether they own vehicles.
On Friday, Newsom pushed back. The governor said his approach was designed to get refund payments into residents’ pockets as quickly as possible. He said issuing income tax refunds, rather than using a DMV database to send rebates to vehicle owners, could delay checks for months and possibly into next year.
“That’s the difference,” Newsom said during a briefing with reporters. “If the Legislature prefers a proposal that delays those payments, and I don’t mean that pejoratively ... we’ll work with them.”
Under Newsom’s plan, California would send $400 gas tax refunds to all registered vehicle owners in the form of debit cards, with a maximum of two refunds, or $800, for those with multiple vehicles. He has said he’s open to capping the rebates to exclude high-value vehicles.
Newsom, who first pitched the idea in March, has about a month left to negotiate a compromise with lawmakers who must pass a state budget. But there are little signs that the stalemate is easing anytime soon.
“The Senate is working to make sure Californians get rebates — not just passing along a one-size-fits-all windfall that benefits millionaires,” Senate President Pro Tem Toni Atkins, D-San Diego, said in a statement. “Senate Democrats do not believe a rebate tied to car ownership does the job.”
Atkins said Newsom’s plan leaves out non-car owners, including elderly and low-income people, who are also impacted by inflation through the rising price of food and consumer goods.
She and Assembly Speaker Anthony Rendon, D-Lakewood (Los Angeles County), have proposed a plan to provide tax rebates — $200 per filer and $200 for each dependent — to residents regardless of whether they own a vehicle.
Their plan would exclude high-income earners by capping eligibility at $250,000 in household income, or $125,000 for single filers.
The Newsom administration has said the program would cap rebates for luxury vehicles valued above a certain amount, in an effort to exclude the wealthiest Californians from receiving rebates. But he has not specified what that cap might be.
That hasn’t appeased many skeptical Democrats, who say spending billions of dollars on a rebate to subsidize drivers of gas-guzzling cars undermines the state’s goals to reduce climatewarming emissions. Republicans, meanwhile, have demanded the state suspend the gas tax immediately, in addition to giving rebates to drivers.
Sen. Scott Wiener, D-San Francisco, equated the governor’s refund proposal to a “shortterm sugar high.”
“It will undermine our ability to make transformational investments with long-term benefits,” Wiener said in a statement. “We have a unique opportunity to deeply invest in California’s future in a way that makes people’s lives better for generations to come.”
Newsom has stressed that his $11.5 billion plan also includes funding for programs that would benefit transit users, cyclists and pedestrians.
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.