Gov. Gavin Newsom (D) and the Democrat-run state legislature struck a deal late Sunday to send cash rebates to California families to help them afford high gas prices. It is the third stimulus plan that California has enacted in less than two years.
California’s surging gas prices are the highest in the nation, at nearly $6.32 per gallon on average, versus $4.90 nationwide, according to the American Automobile Association. Earlier this year, Newsom proposed a $400 rebate for California drivers, and asked the state legislature to postpone a gas tax hike of three cents per gallon that was scheduled by an earlier Democrat-backed law. The legislature refused to postpone the gas tax hike, but negotiated with Newsom on sending out rebate checks.
The final proposal will give California households up to $1,050 to help them afford gas. Capitol Public Radio reported:
Under the tax rebate plan, households making as much as $75,000 for individuals or $150,000 for joint filers would receive $350 per taxpayer, plus an additional $350 if they have at least one dependent. So a single parent would receive $700 and two-parent families would receive $1,050.
The amount would decrease to $250 per taxpayer for households making as much as $125,000 for individuals or $250,000 for joint filers, and to $200 per taxpayer for households making as much as $250,000 for individuals or $500,000 for joint filers. In both of these tiers, parents would receive an additional $250 or $200, respectively, if they have at least one dependent.
Californians with incomes above $250,000 for an individual or $500,000 for joint filers would not receive a rebate. The relief package also includes $1.1 billion in aid for recipients of Supplemental Social Security or CalWORKs.
CalMatters notes that the deal will also help the state about what is known as the Gann limit, a reform proposal adopted in the 1970s that prevents the legislature from exceeding a certain level of per capita spending. If the state spends more than the limit, it has to send a rebate to taxpayers. Instead, the gas rebate will be redistributive, targeting low-income households.
The gas rebate would be the third stimulus that Newsom has enacted, after the “Golden State Stimulus” that sent $600 to low-income families in 2021; and the similar checks Newsom, facing a recall election, sent to two-thirds of California households under his “California Comeback Plan” later in the year. Democrats face tough midterm elections in November.
President Joe Biden has proposed a federal gas tax holiday this summer — an idea that his running mate, then-candidate Barack Obama, dismissed in 2007 as a “gimmick” offered by his opponents in a cheap and desperate attempt to win votes.
Some economists have noted that temporary gas tax holidays and stimulus checks add to the inflationary pressures that are affecting prices across the board, hurting low-income families and households on fixed incomes the most.
California’s gas prices are unusually high due to a combination of factors, including restrictions on local production, narrow supply chains due to limited refinery capacity, heavy regulations, and high taxes. Democrats are not proposing to reform these policies.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. His recent book, RED NOVEMBER, tells the story of the 2020 Democratic presidential primary from a conservative perspective. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.