Proposed Gas Relief
Last updated 8/1/2022 at 11:19am
As gas prices continue to skyrocket, many Californians, who are paying more at the pump compared to the rest of the country, are hoping for some help. This could be soon.
About 23 million eligible Californians could each receive payments of up to $1,050, as part of a $17 billion inflation relief package.
In the proposed gas relief:
- Direct deposits or debit cards will be sent to taxpayers through the Franchise Tax Board
- Income cap of $250,000 for individual taxpayers and $500,000 for joint filers
- An individual who earns up to $75,000 a year would receive a $350 refund.
- Couples who file jointly and make less than $150,000 a year will receive $350 per taxpayer.
- Taxpayers with dependents will receive an extra $350. Example: Couples earning a combined $150,000 and having two children would qualify for $30 per adult plus $350 for their children for a total of $1,050.
- Single taxpayers who make between $75,000 and $125,000 a year and couples who earn between $150,000 and $250,000 will receive $250, plus the same payment for their dependents, for a maximum of $750 per family.
- Couples who earn between $250,000 and $500,000 annually would receive $200 each, plus the same amount for their dependents. That amounts to a maximum payment of $600 per family.
As part of the plan, state officials reached a compromise as the money will go to taxpayers instead of only to vehicle owners as the checks will be larger than legislative leaders had initially proposed.
Money will be distributed when Governor Gavin Newsom and legislative leaders reach an agreement over the framework for the 2022 – 23 state budget.
Though he originally hoped to get money back in people’s pockets this summer, discord among Democrats at the state Capitol delayed the timeline for months. Refunds to offset the highest fuel costs of any state in the nation will probably not start going out until October.
“California’s budget addresses the state’s most pressing needs, and prioritizes getting dollars back into the pockets of millions of Californians who are grappling with global inflation and rising prices of everything from gas to groceries,” Governor Newsom, Senate President pro Tempore Toni G. Atkins, and Assembly Speaker Anthony Rendon said in a press release.
The deal comes as California drivers face the highest gas prices in the nation as the average price for a gallon of gas in the state is $6.23, according to AAA, nearly 30% higher than the national average. The State’s transportation website lists that starting July 1, the gas tax increases by 5.6%. That takes the current tax up to 53.9 cents per gallon, which means you’ll be paying 2.8 cents more per gallon.
Governor Newsom first proposed a gas tax refund in March.
California’s new agreement also includes a suspension of the state sales tax on diesel, which reached as high as $7 across California according to AAA, and additional funds to help residents pay their rent and utility bills, state officials added.
Taxpayers will receive a portion of California’s record-setting $97 billion budget surplus as the funds would only go to residents who make a certain amount of money each year.
Georgia and Maryland have both passed bills to pause their state gas taxes.
Senate Bill 1, which state lawmakers approved in 2017, set for there to be an automatic increase every year to incrementally raise the fuel excise tax.
These taxes go toward fixing roads, repairing potholes, rebuilding bridges and to improve public transportation.
“I think Californians support those ideas, but there is a limit to their patience with the legislature and the governor when gas prices are so high that they just want relief now,” said District 38 State Senator Brian Jones.
Senator Jones says he supports President Joe Biden’s call to suspend federal and state gas taxes and says he wishes Governor Newsom would get on board and pull from California’s nearly $100 billion surplus by dropping the gas tax by 70 cents.
“It’s really a double whammy for these families in San Diegans who are already struggling to make ends meet every month,” Senator Jones said.
He also says call your assembly member, senator and the Governor’s office and say how these prices are impacting your daily life and “encourage the governor to suspend the gas tax so that we can get relief immediately to Californians.”
A contact line for the Governor’s office is 916-445-2841.