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California lawmakers are developing a new gas reimbursement plan

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After rejecting Gov. Gavin Newsom’s proposal to offer tax breaks solely to offset rising gas prices, state Senate and Assembly leaders are working on their own plan to provide broader refunds to meet the rising cost of all goods through payments in $200 to address every California taxpayer and family member.

Assembly Speaker Anthony Rendon (D-Lakewood) and Senate President Pro Tem Toni Atkins (D-San Diego) would limit eligibility to households with incomes up to $250,000, in contrast to other proposals that include even the wealthiest Californians would give rebates an overview of The Times’ Better for Families Refund.

“Speaker Rendon and I are committed to the people of California to find a solution to help people overcome the financial difficulties created by rising fuel and consumer product costs,” Atkins said. “We stand by that promise and have come up with a proposal that would help a vast majority of Californians.”

The proposal could cost the state an estimated $6.8 billion, although that number could change. It’s designed to put more money in the pockets of larger families, with no limit to the number of dependents a taxpayer can claim.

The legislative leadership’s plan is the latest in a series of ideas emerging from the state capitol to help Californians with high gas costs and other expenses.

Katie Talbot, a spokeswoman for Rendon, described the plan as “at a very early stage” and said it was “in line with the spokesman’s goal of providing targeted financial assistance to Californians most in need.”

It comes in the middle of an election year and at a time when inflation and interest rates are rising, increasing fears about the economic future and putting financial pressures on the people of California and across the country. Record state revenues and a voter-approved constitutional spending cap are also fueling a tide of ideas to return money to the state’s residents.

A separate group of Democrats this week proposed a $400 rebate to each taxpayer. Comparing all plans, Rendon and Atkins advisers estimated that these rebates could result in $9.2 billion in lost revenue for the state. Some have questioned whether California’s top earners deserve the same relief as those struggling to make ends meet.

Republicans had previously called for suspending the 51-cent-a-gallon gas tax for six months, costing about $4 billion in transportation revenue. This plan could save each driver $135, although Atkins and others have pointed out that there are no guarantees oil companies would pass those savings on to consumers. However, the bipartisan Legislative Analyst’s Office said in a February report that “most of the change in the tax rate would likely be carried over to prices at the pump”.

Republican Assembly Chairman James Gallagher of Yuba City said he supports sending reduced taxpayer money to Californians and suspending the gas tax. Gallagher wants proposals to go to a vote next week and hopes the much-needed tax break doesn’t get bogged down in a debate among Democrats.

“As Democrats continue to negotiate among themselves, Californians continue to suffer these high costs,” Gallagher said. “We as Republicans have our own plan that brings immediate relief — immediate gas tax suspension.”

In January, Newsom proposed suspending the annual gas tax hike for a year, which lawmakers estimated could cost $500 million in transportation revenue, or about $15 in savings per driver.

Newsom appeared ready to go further in his State of the State address this month, with a vague promise to put more money in the pockets of Californians, which his office described as a tax refund to offset gas prices. Newsom gave no details and his team quickly responded to comments from an advisor that the rebates would likely go to vehicle owners.

Newsom’s office promised more details on its plan next week, saying it would “include funding for public transport so they can take the pressure off drivers directly.”

Rendon and Atkins immediately pledged to give Californians significant tax breaks after Newsom’s speech, but they dismissed the idea that fiscal breaks were intended to reduce funding for road repairs or solely to offset gasoline costs.

While Rendon generally agreed with many principles of the plan unveiled this week to offer taxpayers $400, he also said he would not support anything that gives refunds to the ultra-rich.

Conversely, budget advisors from Atkins and Rendon estimate their plan would send refunds to 90% of taxpayers through the Franchise Tax Board and include a grant program to provide refunds for low-income Californians who don’t file taxes.

“Unlike other proposals, this would include benign critical Proposition 98 funding for schools and resources for road and highway infrastructure and maintenance,” Atkins said Friday. “Right now, families across our state are struggling to stretch their household budgets due to the rising cost of fuel and goods – we are working on a solution that may be the responsible way forward.”

Times contributors Mackenzie Mays and Phil Willon contributed to this report.

https://www.latimes.com/california/story/2022-03-18/california-senate-assembly-weigh-refund-possibilities-amid-rising-gas-costs California lawmakers are developing a new gas reimbursement plan

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