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Gavin Newsom announces California effort to offset skyrocketing fuel costs

Sacramento Bee 3/9/2022 Lindsey Holden, The Sacramento Bee

Mar. 9—Gov. Gavin Newsom says he's developing a plan to help Californians cope with rapidly increasing gasoline prices.

The Democratic governor on Tuesday announced during his State of the State speech that he's planning to work with the Legislature to provide relief for California drivers.

California's average gasoline price was $5.44 per gallon on Tuesday — above the national average of $4.17, according to AAA.

Newsom in January proposed suspending gasoline and diesel fuel tax inflation-related increases expected in July — a plan aimed at saving motorists money when prices were rising faster than they had in nearly 40 years. Since then, Russia's invasion of Ukraine has put added pressure on prices.

"In January, we proposed a pause to the gas taxes," Newsom said. "Now it's clear we have to go further. And that's why — working with legislative leadership — I'll be submitting a proposal to put money back in the pockets of Californians to address rising gas prices."

Newsom offered few details of his plan during the speech, but his office said the plan will involve a tax rebate.

"We are looking to move quickly on this," said Alex Stack, a Newsom spokesman. "The governor is focused on providing billions in relief to Californians who are suffering from rising gas prices across the country due to the ongoing situation in Russia."

Golden State drivers pay the highest state and federal gas taxes in the country at 86.55 cents per gallon, according to the American Petroleum Institute. Illinois motorists are second behind California at 78 cents, and the national average is 57.09 cents.

California also requires a special fuel blend to combat pollution — another factor that leads to more expensive gas.


Video: In State of the State address, Newsom pushes for tax rebate for California car owners (KTXL-TV Sacramento)

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"California gasoline prices are generally higher and more variable than prices in other states because relatively few supply sources offer California's unique blend of gasoline outside of the state," the federal Energy Information Administration said.

State lawmakers react to gas tax relief plan

State lawmakers praised Newsom's proposal, although Republicans encouraged Newsom to join their own efforts to cut gas taxes for California drivers.

Senate President Pro Tem Toni Atkins, D-San Diego, and Assembly Speaker Anthony Rendon, D-Lakewood, said in a statement the Legislature will "seek tax relief from the General Fund," as opposed to a "small cut to the gas tax that might not get passed on to consumers."

"This can avoid taking critical funds away from road repair and improvement, while fully protecting Proposition 98 funding for schools," Atkins and Rendon said. "More details will be developed as the state's revenue picture becomes clearer. In the meantime, every Californian should know this: the Legislature is actively working on a solution to provide substantial relief for you and your family."

Republican Assembly Leader James Gallagher of Yuba City encouraged Newsom to back Assembly Bill 1638 from Assemblyman Kevin Kiley, R-Rocklin, which would suspend the state's gas tax for six months and make up for the loss with General Fund dollars.

Gallagher and Kiley say the bill would save drivers 51 cents per gallon.

"How great would that be right now, with $5 gas that we're all facing?" Gallagher said during his post-State of the State remarks. "We'd love for him to come on and support our legislation."

Gallagher said he would support a potential rebate, but would prefer a tax suspension.

"I love giving taxpayers back their tax money," Gallagher said. "I mean, especially in these times. So if he wants to work on a tax rebate that goes back to every California taxpayer and helps them with the high cost of living, that's certainly something we want to talk about as Republicans. But why not just suspend the gas tax? We have the money to do it. We have the money to suspend the gas tax and save people money right now — not wait till that rebate comes in the mail, but at the actual gas pump."

Senate Republican Leader Scott Wilk of Santa Clarita, who reacted to the speech alongside Gallagher, also encouraged Newsom to work with lawmakers on the other side of the aisle.

"When he's talking about legislative leaders, maybe he's talking about us," Wilks said. "Bipartisan solutions are the best solutions."

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