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Lawmakers, still at odds with Newsom over gas price relief, pass placeholder budget to keep getting paid

San Francisco Chronicle 6/13/2022 By Sophia Bollag
State lawmakers join California Gov. Gavin Newsom at a May 25 press conference discussing gun restrictions in the wake of the mass shooting in Uvalde, Texas. © Rich Pedroncelli/Associated Press

State lawmakers join California Gov. Gavin Newsom at a May 25 press conference discussing gun restrictions in the wake of the mass shooting in Uvalde, Texas.

SACRAMENTO — California lawmakers on Monday passed a placeholder budget that ensures they get paid even though they remain in a stalemate with Gov. Gavin Newsom over how to provide relief for high gas prices and inflation.

The budget bill lawmakers passed would boost funding for education to record levels, increase spending on homelessness, build new infrastructure and put $37 billion into reserve accounts. It would also send $200-per-person payments to families making less than $250,000 per year and individuals making less than $125,000 to provide relief from inflation.

The Newsom administration largely agrees with the Legislature’s budget plan, including its spending on education and housing, but inflation relief continues to be a sticking point, said Erika Li, who represented the Newsom administration during a Monday morning budget hearing.

Newsom opposes the plan to make $200 payments per person. He has said the Franchise Tax Board would take too long to get those payments out the door. Instead, Newsom is proposing to send $400 payments to car owners to offset high gas prices. Under his plan, the state would hire a third-party vendor to disburse payments based on data it receives from the Department of Motor Vehicles.

Many lawmakers say they oppose Newsom’s plan because it ties relief money to car ownership. They argue that doling out stimulus checks based on income is more equitable and that incentivizing car ownership conflicts with the state’s climate change goals.

Assemblyman Vince Fong, the top Republican on the Assembly Budget Committee, has been advocating, along with other Republicans and some Democrats, for a gas tax suspension. Fong, a Bakersfield Republican, argued suspending state gas taxes would be quicker and more effective at combating high gas prices than the other proposals.


Video: State lawmakers struggle to agree on solution for historic gas prices (CBS SF Bay Area)

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Most Democratic lawmakers don’t support cutting or pausing gas taxes, meaning there’s little chance of Fong getting his wish. They have argued the state can’t guarantee gas companies wouldn’t just rake in higher profits, rather than pass savings on to consumers.

During a debate on the budget bill in the Assembly, Fong criticized the legislation for not representing a final agreement with Newsom and for not cutting taxes.

“At best, this budget is incomplete,” Fong said.

Lawmakers had faced a Wednesday deadline to pass a budget under a state law enacted by voters in 2010. If lawmakers don’t pass a budget bill by the middle of June, they forgo their salary until they do.

Budget negotiations are complicated this year by an estimated $97.5 billion surplus that lawmakers and Newsom must decide how to spend. Li cautioned that the state’s economic outlook has worsened since Newsom presented his May budget proposal because of inflation, the war in Ukraine and losses in the stock market.

“The Legislature and the governor clearly share many common priorities,” said Sen. Nancy Skinner, a Berkeley Democrat who leads the Senate Budget Committee. “This budget was crafted on many of the very excellent proposals that the governor put forward, but it also retains and builds on proposals by the Legislature.”

The Assembly passed the budget bill, which represents $300 billion in spending, by a vote of 57-16. The Senate passed the bill 28-8.

It now heads to Newsom. He and lawmakers say they plan to continue negotiating to reach a final budget agreement, which will be enacted through additional legislation in the coming weeks.

Sophia Bollag is a San Francisco Chronicle staff writer. Email: sophia.bollag@sfchronicle.com Twitter: @SophiaBollag

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