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Who Should Get California’s Proposed Inflation Relief Checks?

Gov. Gavin Newsom and Democratic lawmakers have made several proposals on how to help alleviate the financial pressures of increasing gas prices and inflation costs, but it’s unclear which plan will be the final version.

(TNS) — California leaders all agree that residents need some kind of relief from inflation and soaring gasoline prices — but who should qualify? Drivers? Those in lower income brackets? All taxpayers?

At least three plans are now on the table to provide some kind of rebate to Californians coping with expensive fuel costs. But they differ on who would actually get the money.

Golden State fuel prices continue to climb. Calfornia's average price per gallon hit $5.88 on Wednesday, while the national average was about $4.24 per gallon, according to AAA.

Republican legislators have continued to push a plan from Assemblyman Kevin Kiley, R-Rocklin, that would institute a six-month gas tax holiday, although Democrats have not seriously considered it.

Here's what lawmakers are considering to help Californians struggling to fill up their gas tanks and make ends meet.

$400 Rebate for All State Taxpayers

A group of mostly Democratic Assembly members on March 17 proposed giving $400 to all taxpayers, regardless of income level or vehicle ownership.

"Consistent with the state's values as the global leader in combating climate change, this will ensure that the rebate includes taxpayers who use public transit, active transportation options, and zero-emission vehicles," Cottie Petrie-Norris, D-Irvine, said in a news release. "By distributing it to every filer, this is the proven, most efficient way to get money out quickly for a stimulus."

Assembly members said they want to make sure Californians have help paying other bills, not just purchasing gas.

"I just want Californians to know that we hear you," said Assemblywoman Rebecca Bauer-Kahan, D-Orinda. "We see the pain you're feeling at the pump, how inflation is affecting you every day when you do your grocery shopping and feed your family. And so what we as the Assembly Democrats want to do is put this money, this $400 gas rebate into your pockets — not into pockets of oil companies, but straight to you, as California taxpayers and the people we know are feeling this pain every single day."

$200+ Refunds for Low- and Middle-Income Taxpayers

Senate President Pro Tem Toni Atkins, D-San Diego, and Assembly Speaker Anthony Rendon, D-Lakewood, have an early framework for a plan to give tax refund payments to taxpayers under a certain income level starting at $200 and increasing based on a household's number of dependents.

A March 17 memo from Assembly budget advisers Chris Woods and Jason Sisney to Atkins and Rendon lays out a proposal to distribute the funds to 90 percent of taxpayers through the Franchise Tax Board.

Joint tax filers who earn up to $250,000 would qualify, and payments would increase by $200 for each dependent.

"Speaker Rendon and I made a commitment to the people of California that we would find a solution to help people get through the financial hardships imposed by the rising cost of fuel and consumer goods," Atkins said in a statement on Friday. "We're holding true to that promise, and have developed a proposal that would help a vast majority of Californians. The tax refund would also expand based on size of a family, so for families with more dependents — who arguably are facing even higher costs — there would be greater relief."

$400 For Each Vehicle

On Wednesday, Gov. Gavin Newsom fulfilled his State of the State address promise and jumped into the rebate discussion with an entirely different proposal.

His plan would give drivers $400 debit cards for each vehicle — up to $800 in total. Newsom's plan would also include funding to make public transit free for three months.

In addition, it would freeze the annual gas excise tax increase, something Newsom has been promising since his budget announcement in January.

"We're taking immediate action to get money directly into the pockets of Californians who are facing higher gas prices as a direct result of Putin's invasion of Ukraine," Newsom said in a statement. "But this package is also focused on protecting people from volatile gas prices, and advancing clean transportation — providing three months of free public transportation, fast-tracking electric vehicle incentives and charging stations, and new funding for local biking and walking projects."

Newsom's rebate doesn't have an income limit "in order to include all Californians who are facing higher prices due to the cost of oil," the governor's office said.

Which Plan Has the Best Chance of Success

The Atkins-Rendon memo suggests their income-limited plan would cost about $6.8 billion, while the Assembly members' proposal would run the state about $9.2 billion.

Newsom said his rebate-per-vehicle plan would cost about $9 billion, with an additional $750 million for free transit and $523 million to pause the gas tax increase.

The governor said he plans to work with the Legislature on his proposal, and hopes payments could go out by July.

However, Atkins and Rendon have repeatedly expressed a desire to target aid to Californians who need it the most — not including wealthier taxpayers.

"I appreciate Gov. Newsom's work on developing another option to bring relief to Californians experiencing the rising cost of fuel and consumer goods," Atkins said in a statement on Wednesday. "The Senate is focused on ensuring that state money is targeted to those who actually need relief and we look forward to working with Governor Newsom, Speaker Rendon and our Legislative colleagues to quickly develop a proposal that delivers for struggling Californians."

There's also a chance the Legislature could consider multiple rebate options, especially considering the state's large surplus.

Assemblyman Jesse Gabriel, D-Woodland Hills, on March 17 alluded to the possibility that Assembly members' proposal could coexist with Democratic leaders' plan

"This proposal here is without prejudice to other things that the Legislature might do," Gabriel said. "I know I've had conversations with colleagues about rebates that are more targeted, that are more means-tested to address other issues — to address cost of living increases to make sure that low income communities are getting more money back in their pockets, that we're directing our surplus to those who need it the most."

©2022 The Sacramento Bee. Distributed by Tribune Content Agency, LLC.
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