Electronic tax

California governor, lawmakers close to gas tax rebate deal


FILE – High gas prices are displayed in Los Angeles, Thursday, June 16, 2022. California is reportedly sending hundreds of dollars in rebates to most ratepayers under an interim budget proposal being discussed by Governor Gavin Newsom and legislative leaders on Friday, June 24. 2022, (AP Photo/Jae C. Hong, File)


Most California taxpayers would receive hundreds of dollars in cash to help offset the high price of fuel and other goods as part of an interim budget compromise discussed by legislative leaders and Governor Gavin Newsom.

The plan would return some of California’s record $97 billion budget surplus to taxpayers – but the money would only go to people who earned below a certain income level.

Newsom and legislative leaders were still negotiating the state budget on Friday, with talks expected to extend into the weekend. Although the two sides have agreed on a framework for the discounts, the overall numbers could change as other parts of the budget are finalized. But in general, the less money people earn in a year, the more money they receive from the state.

The current proposal would bring about $9.5 billion to taxpayers. Singles earning less than $75,000 a year and couples earning less than $150,000 a year would receive $350 per taxpayer, plus an additional $350 for each dependent. This means that a married couple earning $100,000 a year with one child would receive $1,050.

Singles earning less than $125,000 a year and couples earning less than $250,000 a year would receive $250 each plus their dependents. Singles earning less than $250,000 a year and couples earning less than $500,000 a year would receive $200 each plus their dependents.

The proposal was confirmed by Assemblyman Miguel Santiago, a Democrat from Los Angeles. Santiago announced the plan in a press release late Friday afternoon, calling it an agreement between Newsom and the Legislative Assembly. But a representative from the Santiago office later clarified that the deal had not yet been finalized.

“As prices rise on everything from gasoline to infant formula, this rebate will help the vast majority of California taxpayers, including undocumented Californians, with hundreds of dollars in direct cash assistance, providing relief critical during difficult times,” Santiago said.

The statewide average price of a gallon of regular unleaded gasoline in California hit a record high of $6.44 last week. The average price was $6.35 a gallon on Friday, compared to the national average of $4.93.

Republicans, who don’t control enough seats in the state Legislature to pass anything, have called on Newsom and Democrats to temporarily suspend the state’s gas tax — which, at 51 .1 cents per gallon is the second highest in the country. The tax is set to rise to 53.9 cents per gallon next week, an automatic adjustment that is part of a state law meant to keep up with inflation.

Newsom and Democratic leaders have refused to suspend the gas tax, arguing that it would not guarantee a price drop big enough to benefit drivers. They also said it would cost construction jobs because the tax pays for statewide highway maintenance.

Instead, they pledged months ago to use the state budget surplus to send money directly to taxpayers. But so far, nothing has happened as Newsom and legislative leaders have been unable to agree on how to proceed. Newsom had proposed sending the money to owners of registered vehicles, while lawmakers wanted to send the money to filers.

The proposal announced on Friday is a compromise. The money would go to taxpayers rather than vehicle owners, but the checks would be larger than legislative leaders originally proposed.