Gas Rebate Could Net California Families Up to $1,050

Gov. Gavin Newsom and legislative leaders have reached a tentative agreement to provide as much as $1,050 to millions of California families to help with rising gas prices and inflation, according to emails sent this week to Democratic members of the state Senate and Assembly.

The three-tier program would benefit an estimated 17.4 million California taxpayers, including individual filers making as much as $250,000 and joint filers making as much as $500,000, according to the outline obtained by CalMatters, with lower- and middle-income households set to receive incrementally more money.

The plan is part of a broader $300 billion budget deal that state leaders continue to negotiate ahead of the July 1 start of the fiscal year.

Though the email to Democratic senators and their chiefs of staff called the rebate proposal an “agreement,” a spokesperson for Senate President Pro Tem Toni Atkins, a San Diego Democrat, cautioned today in a statement that “any tentative agreement can unravel.”

Californians with incomes above $250,000 for individuals or $500,000 for joint filers would not receive a rebate. The plan would also include an increase for recipients of Supplemental Security Income who do not file taxes.

Differences in proposed spending for universities, housing and social safety net programs, as well as the details of a major climate package, lingered as the Legislature passed a placeholder budget earlier this month. But the biggest holdup to a bargain, which must go into print by Monday to pass before lawmakers leave for summer recess at the end of the month, has been the dispute over direct financial assistance for taxpayers.

Newsom and legislative leaders were at odds for months over whether to target the relief at drivers or the neediest Californians.

During his State of the State speech in March, the governor called for a plan to address spiraling gas prices, which have since reached an average of more than $6 per gallon. He proposed to send $400 debit cards to every registered vehicle owner in the state, up to two per person.

Legislative leaders firmly resisted that approach, which did not include an income limit. Progressive critics noted that it would benefit millionaires and billionaires while leaving out Californians too poor to own their own cars.

The deal announced today is much closer to the program that Atkins and Assembly Speaker Anthony Rendon devised, under which the state would have cut $200 checks for each eligible taxpayer and their dependents living in households making less than $250,000 per year for joint filers or $125,000 per year for individuals.

Despite growing demands from Republican lawmakers, plus an increasing number of Democrats, the plan does not include a suspension of the state’s gas tax, which is set to increase by $0.03 on July 1.