Gov. Gavin Newsom Proposes Sending Californians $800 in Gas Tax Refunds To Combat High Fuel Prices

by TK Sanders
(Photo by Justin Sullivan/Getty Images)

California Gov. Gavin Newsom, who is up for reelection this November, recently proposed a new series of gas tax refunds for residents of the state. States across the country are trying to devise unique ways to ease consumer burdens at the pump — some eliminated the local gas tax, while others are considering stimulus programs.

At a glance

  • California Governor Gavin Newsom wants to alleviate gas price pressure by issuing rebate checks that will act as tax refunds
  • In the proposal, the state will issue rebate checks to vehicle owners only, but it will also provide free public transit for three months
  • Newsom blamed rising gas prices on Putin’s invasion of Ukraine
  • California is currently juggling multiple solutions to the gas price issue in their legislative houses

Gov. Newsom’s plan would give vehicle owners an $800 direct relief payment as California drivers cope with the nation’s highest gas prices, USA Today reports. Few, if any, other states have proposed such an aggressive measure as of yet. Last week, Georgia and Maryland both passed bills to pause their state gas taxes of about 29 cents and 36 cents per gallon of regular gasoline, respectively. Massachusetts, New Jersey, and Connecticut will likely lower or cut gas taxes soon, too, per reports out of their legislatures.

Last year, the state of California sent out millions of $600 stimulus checks after massively over-budgeting for the fiscal year. This latest stimulus package would exceed last year’s round of checks by over 30 percent.

The California gas tax refunds will cost billions of dollars

Under the proposal, the state would issue a $400 debit card for every registered vehicle — up to two per person — for a final price tag of around $9 billion. Additionally, all residents would receive free public transit vouchers, too, for three months in an effort to drive less. The plan has not yet been approved by the state’s lawmakers.

“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.

The average California driver spends about $300 in gas taxes per year, according to the governor’s office. Therefore, suspending the gas tax like Maryland or Georgia may actually save the state money versus distributing debit cards. But thus far, lawmakers have not found common ground in their efforts to offset the price of gas in California, where prices routinely exceed $6 per gallon in metropolitan areas. In fact, Democratic lawmakers rejected a Republican-led proposal to suspend the state’s 51-cent gas tax recently.

According to the Los Angeles Times, a group of lawmakers proposed $400 in rebates for all taxpayers last week; which would exceed just registered vehicle owners. Democratic leaders in the Assembly and Senate also proposed a plan to address the rising costs of all goods. This plan would give $200 to taxpayers and dependents with an income cap of $250,000.