Governor Newsom’s Gas Tax Scheme Passes Assembly – But Not Without a Splendid Fight

‘Stand up for yourselves – We make the policy’

The California Assembly hosted a side show Monday, when after jamming SBX1-2, Gov. Gavin Newsom’s Gas Tax, through an expedited hearing earlier, pretended that was enough exposure to the public, and debated the bill and voted on it.

Gov. Gavin Newsom’s Gas Tax, as it is being called in some circles, would create a new panel of unelected bureaucrats with subpoena power, to investigate oil and gas companies, impose penalties, new costs and regulations, which would inevitably lead to gas shortages, rationing and price spikes. The bill creates a new government agency to arbitrarily decide how much profit oil and gas businesses are allowed to make, disrupting California’s energy market and threatening the reliability of the state’s fuel supply, according to Assembly Republicans.

The governor’s scheme is to “create a new independent watchdog within the California Energy Commission charged with monitoring California’s petroleum market on a daily basis to ensure market participants play by the rules.”

Like something out of Venezuela, where the oil and gas industry were nationalized, the amended bill actually states:

This bill would authorize the commission to establish a maximum gross gasoline refining margin at an unspecified amount per gallon and would authorize the commission to annually adjust the maximum gross gasoline refining margin, as provided.

The bill would require the commission, if the commission establishes the maximum gross gasoline refining margin, to establish a penalty for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to assess impose an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin.

Democrat Assembly leaders and members however, also received a lesson in Econ 101 and Civics.

Assembly Republican Leader James Gallagher asked Assembly colleagues why they would allow Gov. Gavin Newsom to drive state policy with his bill, which was only in print one week. While the Extraordinary Legislative Session was called back in December 2022, ostensibly to address the “windfall profits” of the oil and gas industry in California, according to Gov. Newsom, there has been plenty of time to openly debate how to address the governor’s concerns, as well as hear from the oil and gas industry.

As California Globe contributor Chris Micheli recently addressed, “For those watching the Senate and Assembly Floors on Thursday, March 23, 2023, one bill jumped through several procedural hurdles in a single day. The bill is SBX1-2 (or SB 2x) dealing with the maximum gross gasoline refining margin. It is a special session (in the First Extraordinary Session) bill.”

“Because SB 2x is a special session bill, it is not subject to a number of legislative rules,” Micheli explained – which explains the antics.

However, Republicans duly noted that Democrats and the governor have had 6 months to present the bill in various committees and debate its merits. “You are about to vote on a bill in print one week,” Assemnbly republican Leader Gallagher said. “We’ve been in extraordinary session six months.”

“You are allowing the governor to drive policy, and not the Legislature,” Gallagher said. “He doesn’t care about our ideas. The whole time we’ve heard one idea – his. No other bills or ideas got heard – there was no discussion.”

“You’ve gotten a week. What kind of process is this?” Gallagher asked incredulously.

“Stand up for yourselves – We make the policy,” Gallagher added.

He said the Assembly could continue to hold the extraordinary session and listen to all of the ideas and proposals. And he noted at one hearing on an earlier version of the gas tax increase, Berkeley and Stanford experts agreed the policy would lead to higher prices.

“Democrats have spent years driving up the cost of gas with a steady stream of taxes, fees and regulations. This bill is no different,” said Gallagher. “When we see gas lines and soaring prices, Democrats will have only themselves to blame, and I’m confident that Californians will hold them accountable. If Democrats were serious about lowering gas prices, they would back our efforts to give drivers a gas tax holiday.”

Assemblyman Bill Essayli (R-Riverside) said that it is California policy driving up gas prices. And he noted that is exactly what Democrats want – to drive up gas prices enough, that people are forced out of their cars and onto public transportation. “I’m saying the quiet part out loud, that the state wants to drive people away from gas powered cars,” he said.

“Interest groups want people out of their cars,” he added, noting that most of the bill’s supporters are environmental justice and climate change groups.

Today California imports about 75% of the oil we consume. In 1982, California had 43 operational oil refineries and a population of nearly 25 million; today we have 11 operational oil refineries and a population of nearly 40 million.

Ironically, Essayli said that the California Energy Commission, which will oversee the new oil and gas regulatory commission, can’t even manage California’s electricity prices. “If the CEC can demonstrate they can bring down electricity prices, then maybe we give them this.”

Essayli also noted that if it’s excess profits Democrats have such a problem with, Gov. Newsom’s own state budget is exceedingly larger than last year’s, and the year before, and the year before. “What about government excess profits?” he asked.

Assemblyman Vince Fong, a Republican who represents Kern County and the oil industry said,  “With little public input, the Governor jammed his proposal that demonizes domestic energy production in our state – a policy that will only harm hard-working Californians. By creating a hostile business climate, the Governor is putting Californians out of work and will make California more dependent on foreign sources of oil and natural gas.”

As one oil and gas industry expert told the Globe recently, “Currently, the convenient scapegoat for all our pain at the pump is Vladimir Putin. Well, historical facts in California paint a different picture. California set it’s record for the retail cost of gas in June of 2008 at $4.53 a gallon, according to the Energy Information Agency (EIA), Global oil averaged $131.00 a barrel that month. In October 2012 we hit that cost of gas again but crude only averaged $103.00 that month. We broke that all time record, not when Putin invaded Ukraine, but on November 15, 2021, when crude oil averaged $82.00 a barrel- more than 3 months before the invasion of Ukraine. The prices of gas and diesel have continued to climb since that day.”

When it came time for the entire Assembly to vote, SBX1-2 passed 52-19 on the floor.

Assemblyman Health Flora (R-Ripon) made a motion to lock the roll vote, and not allow any add ons, which is typically happens when not all members cast a vote during the floor debate and voting. His motion didn’t pass but as the Globe Tweeted, remember these votes:

California Assembly SBX1-2 vote. (Photo: screen capture

We will follow up and report who changes their vote, or adds on.

UPDATE March 27, 2023: The final vote was 58-19 with 3 non-votes. The 6 add-on votes were Assembly members Mike Gipson, Stephanie Nguyen, Cottie Petrie Norris, Freddie Rodriguez, Avelino Valencia, and Carlos Villapudua. One Democrat voted no: Assemblywoman Jasmit Baines.

Click here to read the full article in the California Globe

Assemblyman Fong Brings Back Bill to Suspend Gas Taxes for One Year

Gas prices are higher in California than the rest of the country because of taxes, fees, and mandates

Assemblyman Vince Fong (R-Bakersfield) brought back Assembly Bill proposals earlier this month to temporarily suspend the California state gas taxes for an entire year.

Assembly Bill 53 and Assembly Bill X1-2, both authored by Fong, would not only suspend the gas tax for a year, but they would require gas stations to carry over all tax savings directly to the consumer as well as put what the gas tax savings was compared to if the tax had been applied to on the receipt. According to the bills, all projects that the gas tax currently funds, such as bridge and street repair, transportation infrastructure maintenance, and other transportation needs, would subsequently be paid for by the state’s general fund until the end of the gas tax break.

A moratorium on the gas tax has been attempted several times since SB 1 was passed in 2017. The most recent attempt was earlier this year when AB 1638, A bill by then-Assemblyman Kevin Kiley, failed to pass  because of Democratic lawmaker hijinks and objections. If it had been passed the bill would have mitigated skyrocketing gas prices by reducing gas by 51 cents per gallon for a total of six months. While lawmakers refused to pass the tax relief, gas spiraled upwards well above a $6 per gallon average. Other states successfully removed their gas taxes temporarily.

This year, instead of a gas tax drop, Newsom has put out a price-gouging penalty on oil companies to stop steep price increases. Many have pointed out that this would essentially create a new tax on oil and gas companies in everything but name.

However, this time around for Republicans, Fong said that the new bills, while saving Californians money at the pump, would also give Californians more money overall to spend at a time of economic uncertainty and high inflation.

Gas tax suspension bill

“These bills will provide immediate relief by lowering prices at the pump for all Californians,” said Assemblyman Fong last week. “The Governor continues to demonize the hard working people that power California and proposes to increase energy cost even more with his ill-conceived price control proposal. The contrast could not be clearer. These measures to temporarily suspend the state’s gas tax will bring more money back in the hands of California drivers. In addition to suspending the gas tax, the long term solution to the energy crisis the Governor created is to give families more reliable, affordable and dependable energy supply.”

“There has been study after study after study examining why gas prices are higher here in California than the rest of the United States – because of taxes, fees, and mandates. It’s the policies that the Newsom administration has put in place. And so if they’re serious about reducing the price of gasoline, then they need to look in the mirror. We want contrasting policies. Let’s have a debate. There are two contrasting directions Our proposal brings immediate relief to Californians. Let’s temporarily suspend the gas tax and give Californians immediate relief. The Governor’s proposal or energy tax or however he wants to describe it, would stifle the energy supply, increase costs and could potentially lead to energy shortages. I think the choice is pretty clear.”

“The Governor is very good at creating splashy headlines. He is currently trying to deflect Californians away from the direct consequences of the energy crisis that his policies have created.”

Energy experts noted that Fong’s proposal would be better than Newsom’s in gas price reduction, but would also come with a few negative side effects.

“Overall, reducing the gas tax would help Californians out miles more than Newsom’s plan to put penalties on oil companies,” explained Matt Jeffries, an energy sector advisor, to the Globe on Monday. “That’s way better savings. Over half a dollar off a gallon of gas goes a long way. You fill up a few times a week, and it adds up quickly. Newsom’s plan is a lot more convoluted. But, also, do you really think he wouldn’t veto the bill if it made it to him in order to protect his plan?”

Click here to read the full article in California Globe

Gov. Newsom Calls for Tax on ‘Windfall Profits’ on Oil Companies After Abandoning Gas Tax Pause

Says he’s returning profits to Californians after passing ‘sweeping climate change’ bills further restricting oil and gas extraction

“Crude oil prices are dropping, but oil and gas companies are still raising prices on California consumers,” California Gov. Newsom said, announcing a new “windfall profits tax” on oil companies. “These price hikes cannot be attributed solely to refinery maintenance issues, hurricane disruptions, or even state taxes,” Newsom said.

“Gas prices have increased by a record $0.84 per gallon in just over one week,” the governor said.

In a video, Gov. Newsom addressed the $2.50 difference between California’s highest-in-the-nation gas prices, over $7.00 in some California locations, and the rest of the country. “This degree of divergence from the national prices has never happened before. And oil companies? They provide no explanation. The fact is, they’re ripping you off,” he said. “Their record profits are coming at your expense.”

Newsom left out of his video the part where in 2021 he largely killed hydraulic fracturing for natural gas in California as part of his overall plan to end oil extraction. He also announced his action to halt issuance of fracking permits by 2024.

Gov. Newsom just signed a package of “sweeping legislation” in September to achieve statewide carbon neutrality as soon as possible, and no later than 2045, by establishing an 85% emissions reduction target, capping oil wells, slowing oil and gas permitting, making it impossible to increase refining capacity, and entirely phasing out oil and gas starting in two years. And that’s just the start.

The overall goal of Newsom’s “sweeping” climate change package is “Achieving net zero GHG emissions” in the state, and that means outlawing oil and gas. So pretty much everything we use in modern society needs to be upended, overhauled, and restricted, according to the Gov. Newsom and the burgeoning industry of climate change hustlers.

Yet, when the California Legislature had a chance to halt increasing California gas tax increases, they didn’t. Nor did the governor. In March, the Assembly Transportation Committee was set to hear AB 1638 by Assemblyman Kevin Kiley, to suspend California’s .51 cent gas tax (CA gas tax is now .54 cents). Kiley noted that Maryland and Georgia had just reduced their gas taxes, and the people of those states saw immediate results. He said rebates are a good idea, especially with a substantial state surplus, and should be much larger, returning to overtaxed tax payers more of their own money.

“Newsom and the Legislature are officially out of excuses and need to enact my bill immediately,” Assemblyman Kevin Kiley (R-Rocklin) Tweeted in March.

However, legislative antics and partisan politics won the day. Rather than debating the proposal to suspend the summer gas tax increase, Kiley’s bill was hijacked by Democrats who passed amendments to gut the bill so they could not be accused of voting for the gas tax increase.

Democrats diddled for 100 days to provide relief at the pump for the state’s drivers from the record high gas prices,” the Globe reported in June. California Democrats abandoned the opportunity for a gas tax holiday, and then announced they were forming a new committee to investigate gas price gouging to make it appear they were doing something.

Assemblyman James Gallagher (R-Yuba City) offered his retort with this: “Easy to read investigative report into how government is adding $1.30 to each gallon of gas in CA. Rather than launching a new ‘investigation,’ Governor Newsom and legislative leaders need to immediately suspend our state gas tax, which is almost 3 times higher than the federal tax.”

Kiley added: “A federal gas tax holiday would save drivers over 18 cents per gallon at the pump. If California suspended its gas tax as well, drivers would save an additional 51 cents for a total of nearly 70 cents per gallon in savings. The Penn Wharton Budget Model released last week shows “evidence that recent suspensions of state gasoline taxes in three states were mostly passed onto consumers.”

In June Kiley Tweeted this prophetic statement: “Democrat Legislators have written a strongly worded letter demanding an investigation into the ‘real’ causes of high gas prices. This is not satire.”

“Senate Republicans have been calling for gas tax relief for a year, and keeping the pressure on is paying off. Consumers are fed-up, and Democrats are scrambling to compensate with a ‘Hail Mary’ pass on gas tax relief, said Senate Republican Leader Scott Wilk.”

Wilk provided some of the policies implemented in California that drive up the cost of gasoline:

  • 51.1 cents – State gas tax (add an additional 3 cents starting July 1.)
  • 25 cents – Cap and Trade (estimate)
  • 22 cents – Low Carbon Fuel Standard (estimate)
  • 2 cents – Underground Storage Fee
  • 10-15 cents – California’s switch to summer-blend costs more to produce than other types of gasoline. Source.
  • 14.4 cents – State sales tax (estimate based on 6/20 average price)

Flash forward to October 2022, and Gov. Newsom is using sleight-of-hand, blaming oil companies for “windfall profits.”

Assemblyman Kevin Kiley (R-Rocklin) again addressed Gov. Newsom’s proposal to raise taxes on oil producers:

“Californians need immediate relief from soaring gas prices, which we can provide by passing my bipartisan proposal to suspend the gas tax. Instead, Governor Newsom wants to increase taxes yet again,” Kiley said. “The Governor’s tax hike will make matters worse, by restricting production and passing on costs to consumers in the form of higher gas prices. Californians simply cannot afford more backward policies.”

California’s average gas price hit $6.29 per gallon today, nearly $2.50 more than the national average. This is just 15 cents below the state’s record high of $6.44 set in June of this year and an increase of nearly 80 cents in the past week alone.

In January, Kiley introduced AB 1638, an urgency measure that would have immediately suspended the gas tax and saved Californian’s over 50 cents per gallon at the pump. That bill was rejected in the Assembly on multiple occasions. Instead of providing relief, the Speaker of the Assembly created the Select Committee on Gasoline Supply and Pricing to study the issue. To date, the committee has held two hearings and has yet to produce anything actionable.

And now energy giant Chevron Corporation will be moving the bulk of the company to Texas next year.

It may be October, but Gov. Newsom’s trickery isn’t fooling anyone.

Click here to read the full article in the California Globe

Gavin Newsom says Gas Prices are Skyrocketing. His Solution? A New Tax

As California experiences an historic surge in gas prices, Gov. Gavin Newsom on Friday proposed a new tax on oil companies that would fund rebates for Golden State taxpayers getting squeezed at the pump. Newsom said in a statement that he was working with members of the California legislature to charge a windfall profit tax on companies engaged in the extraction, production and refining of oil. Under the proposal, the companies would pay a higher tax rate on their earnings above a set amount each year. The funds collected would then be directed to California taxpayers in the form of rebates or refunds, the statement said. “Crude oil prices are down but oil and gas companies have jacked up prices at the pump in California. This doesn’t add up,” Newsom said in a release. “We’re not going to stand by while greedy oil companies fleece Californians.”

The governor did not hold a news conference about the proposal so many questions remain unanswered, including his timeline for implementation, what the earnings threshold would be for companies and how the rebates would be distributed. In a joint statement released late Friday afternoon, Senate President pro Tempore Toni Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) said that they are going to work with the members of their respective caucuses to “take a hard look at any proposal to go after windfall profits that oil companies are raking in by bilking consumers.” “We know this is something Californians want action on, and we are acting,” the statement read.

The announcement came just hours after Newsom directed the California Air Resources Board to “take whatever steps are necessary” to permit refineries to begin making and distributing winter-blend gasoline, which is easier to make and cheaper for consumers. As of Friday, California’s price at the pump is an average $6.29 — more than $2 above the national average of $3.80, according to data from AAA. While the price of crude oil has declined, California’s cost-per-gallon has risen by a record 84 cents in the last 10 days. Some of that disparity can be attributed to the Golden State’s 54-cent gasoline excise tax, which is the second-highest in the country, and the state’s rigid environmental regulations. But Newsom said oil companies have “failed to provide” a complete explanation for the unprecedented divergence between California’s price at the pump and those in other parts of the country. The California Energy Commission on Friday sent a letter to refinery executives at Chevron, Marathon Petroleum, PBF Energy, Phillips 66 and Valero to request comprehensive explanations for the recent spike in prices. Legislatures quickly weighed in both in support — and in opposition — of Newsom’s tax proposal. Assemblymember Alex Lee (D-San José) wrote on Twitter, “glad (Gavin Newsom and I agree: Fossil Fuel Corporations are ripping us off and it’s time we redistributed their profits to the people.” Lee unveiled a similar proposal earlier this legislative session. Assemblywoman Laurie Davies (R-San Juan Capistrano), meanwhile, took issue with the governor levying even more taxes in tax-heavy California.

Click here to read the full article at the FresnoBee

California ‘The State Everyone Can’t Wait to Leave Behind,’ Kevin Kiley Tells CPAC Audience

Republican congressional candidate Kevin Kiley used the national conservative stage Saturday to forcefully denounce Gov. Gavin Newsom and paint California as a place where people “walk down streets that double as restrooms and injection sites.” Kiley spoke Saturday at the CPAC convention in Dallas, a gathering that included some of the conservative movements’ biggest – and most controversial – figures, including former President Donald Trump. Trump endorsed Kiley during the primary campaign in May. “Gavin Newsom’s California is not a model to the nation. It is a warning to the nation,” Kiley said as the audience cheered.

California “used to be a state where anyone could get ahead, the California dream,” Kiley said. “Now we’re the state everyone can’t wait to leave behind.” Kiley, who faces Democrat Kermit Jones in November, has been a consistent, vocal critic of Newsom. Newsom has tried recently to boost his national profile, with a television ad in Florida criticizing that state’s conservative policies and newspaper ads in Texas criticizing Gov. Greg Abbott’s policies on abortion and guns.

Kiley was a candidate in last year’s California election attempting to recall Newsom. The governor won easily. Kiley received 3.5% of the vote. Since then, Kiley, a Rocklin assemblyman, has turned his attention to his bid for the new Third District House seat. The district is being closely watched as Republicans need a net gain of four seats to win control of the House.

It goes from Plumas County in the northeast corner of the state, through Sacramento’s suburbs and south to Inyo County, between the Sierra Nevada mountains and the Nevada border. The district is rated by independent analysts as a likely Republican win in November. CPAC is a gathering of conservatives that in recent years has become more identified with the Trump wing of the party. The national Democratic Party this week called the meeting “nothing but an extreme GOP cattle call.” The program has featured a parade of conservative stars, including Rep.. Marjorie Taylor Greene, R-Ga., My Pillow CEO and election conspiracy theorist Mike Lindell and others. Kiley spoke for five minutes Saturday and told the appreciative audience that while a Democratic-run legislature and State House caused California to decline, Newsom “brought that decline to a total freefall.:”

Click here to read the full article in the Sacramento Bee

California Tax Relief: What’s In the Deal

Gov. Gavin Newsom and legislative leaders have agreed to provide as much as $1,050 to millions of California families to help with rising gas prices and inflation, they confirmed Sunday night.

The three-tier program would benefit an estimated 23 million California taxpayers, including individual filers making as much as $250,000 and joint filers making as much as $500,000, with low- and middle-income households set to receive incrementally more money.

The $9.5 billion in tax refunds, which CalMatters reported Friday, is part of a $12 billion relief plan that is central to a broader $300 billion budget deal that state leaders announced Sunday night.

“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,” NewsomSenate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon said in a joint statement.

Under the tax rebate plan, households making as much as $75,000 for individuals or $150,000 for joint filers would receive $350 per taxpayer, plus an additional $350 if they have at least one dependent. So a single parent would receive $700 and two-parent families would receive $1,050.

The amount would decrease to $250 per taxpayer for households making as much as $125,000 for individuals or $250,000 for joint filers, and to $200 per taxpayer for households making as much as $250,000 for individuals or $500,000 for joint filers. In both of these tiers, parents would receive an additional $250 or $200, respectively, if they have at least one dependent.

Californians with incomes above $250,000 for an individual or $500,000 for joint filers would not receive a rebate. The relief package also includes $1.1 billion in aid for recipients of Supplemental Social Security or CalWORKs.

“The plan recognizes that some people are hurting more than others and gives them greater relief,” according to an email sent earlier this week to Assembly Democrats.

Differences in proposed spending for universities, housing and social safety net programs, as well as the details of a major climate package, lingered as the Legislature passed a placeholder budget earlier this month. But the biggest holdup to a bargain, which must pass before lawmakers leave for summer recess at the end of the month, had been the dispute over direct financial assistance for taxpayers.

Newsom and legislative leaders were at odds for months over whether to target the relief at drivers or the neediest Californians.

During his State of the State speech in March, the governor called for a plan to address spiraling gas prices, which have since reached an average of more than $6 per gallon. He proposed to send $400 debit cards to every registered vehicle owner in the state, up to two per person.

Legislative leaders firmly resisted that approach, which did not include an income limit. Progressive critics noted that it would benefit millionaires and billionaires while leaving out Californians too poor to own their own cars.

Click here to read the full article in CalMatters

Will California Suspend its Gas Tax? Debate over Fuel Costs Rages on as Biden Weighs In

California legislators have been at odds over suspending the state’s gas tax for months, but a presidential call to action and growing Democratic support is adding energy to the movement to cut fees at the pump. President Joe Biden on Wednesday proposed that Congress to suspend the federal gas tax for three months and for states to “take similar action to provide some direct relief, whether suspending their own gas taxes or helping consumers in other ways.” California’s gas excise tax — which funds road and infrastructure repairs — currently costs drivers 51 cents per gallon and will rise to 54 cents in July. The federal gas tax is 18 cents per gallon for regular gasoline.

The Golden State is home to the country’s highest gas prices. The statewide average on Thursday was about $6.36 per gallon, while the national average was at $4.94 per gallon, according to AAA. Although legislative leaders continue to push against suspension, some Democrats are joining Republican lawmakers in advocating for a break while fuel costs are hitting consumers the hardest. SOME DEMOCRATS SUPPORT GAS TAX RELIEF For some time, a handful of legislative Democrats have suggested they would support some form of gas tax break. That number grew on Wednesday. In late April, a handful of Democrats, including Assemblyman Tim Grayson, D-Concord, and Assemblyman Carlos Villapudua, D-Stockton, joined a group known as the “California Problem Solvers Caucus” to support a 12-month gas tax suspension that would require retailers to pass cost savings along to consumers. On June 17, some Democratic Assemblymembers also pushed to suspend the 3-cent gas tax increase that will take effect on July 1, even though legislative leaders already declined to do so in advance of the May 1 deadline.

On Wednesday, Assemblyman Rudy Salas Jr., D-Bakersfield, in the midst of a congressional campaign, announced he plans to hold a Friday press conference in his district to call for a gas tax suspension. Assemblyman Robert Rivas, D-Hollister, also praised Biden, although he stopped short of supporting a California version of the tax holiday. Rivas has made moves to take over the Assembly Speaker role from Assemblyman Anthony Rendon, D-Lakewood, and is still campaigning for the job.

Click here to read the full article in the Fresno Bee

CA Democrats Abandon Gas Tax Holiday; Announce New Committee to Investigate Gas Price Gouging

“Friday marked 100 days of diddling by California’s supermajority party to provide relief at the pump for the state’s drivers from the record high gas prices,” the Globe reported Monday, ahead of the announcement by Assembly Democrats that rather than suspending California’s highest-in-the-nation gas taxes, they are going to “investigate” the state’s highest-in-the-nation gas prices. They are looking for a culprit.

Assemblyman James Gallagher (R-Yuba City) offered his retort with this: “Easy to read investigative report into how government is adding $1.30 to each gallon of gas in CA.”

And that state excise tax is going up to 53.9 cents July 1st, because as we learned Monday from Assembly Democrats, it’s too late to suspend the July 1st gas tax increase. It had to have been done 60 days ago.

Why wasn’t the July 1st gas tax increase suspended 60 days ago? Inquiring minds want to know.

Rather than address immediate solutions, Assembly Democrats Monday announced the creation of a new select committee to investigate whether the state’s oil and gas “profiteers” are price gouging. This is pitiful given that going back to last year at this time, Democrats vowed to take action to help working and poor Californians struggling to pay for gas, but have done absolutely nothing except talk about it.

“It’s no secret Californians are enduring pain at the pump,” Assemblywoman Jacqui Irwin (D-Thousand Oaks) said. “California leaders must protect consumers from harm.”  Suspending the gas tax is a good place to start, but she offered no concrete solutions – just her feelings and concerns.

The Assembly Democrats’ press conference claiming “gas price gouging” was a lot of non-commitments among elected lawmakers – lots of “we feel your pain” moments. But hey Californians, we have a new select committee to investigate the state’s high gas prices – by going after big oil.

Lawmakers said they find the high gas prices “outrageous,” and “unacceptable,” and claimed “we are doing everything in our power to provide you relief.”

Apparently Assembly Democrats are powerless, because all they have done so far is clutch at their pearls and speak in dulcet tones of their empathy and concern as they are driven in a dark SUV to and from the airport. “We are all Democrats and on the same team,” said Assemblywoman Cottie Petrie-Norris (D-Laguna Beach). She said Democrats are committed to a decision and fix on gas price gouging.

And that’s all she said.

With this new select committee, they can now order oil company executives to hearings and demand they open their books to show evidence of their “profiteering.”

This is what’s known as a diversion, an aberration, a deviation from the crux of the issue. (See graphic above)

Assembly Speaker Anthony Rendon (D-Los Angeles) talked of Californians “addiction of the gas-powered engine,” and said Chevron and Shell are “ripping off consumers.”

Republicans have consistently proposed a solution for relief at the pump – suspend the gas taxes. “The price of gas has been crushing family budgets for months,” Assemblyman Republican Leader Gallagher said in response to the Democrats’ press conference. “If Capitol Democrats were really doing everything in their power to lower gas prices, they would support our call to suspend the gas tax and halt the scheduled July 1st increase. Californians don’t need another dead-end study, they need relief now.”

“Senate Republicans have been calling for gas tax relief for a year, and keeping the pressure on is paying off. Consumers are fed-up, and Democrats are scrambling to compensate with a ‘Hail Mary’ pass on gas tax relief, said Senate Republican Leader Scott Wilk.”

Wilk provided some of the policies implemented in California that drive up the cost of gasoline:

  • 51.1 cents – State gas tax (add an additional 3 cents starting July 1.)
  • 25 cents – Cap and Trade (estimate)
  • 22 cents – Low Carbon Fuel Standard (estimate)
  • 2 cents – Underground Storage Fee
  • 10-15 cents – California’s switch to summer-blend costs more to produce than other types of gasoline. Source.
  • 14.4 cents – State sales tax (estimate based on 6/20 average price)

Sen. Wilk noted that some Assembly Democrats are also joining Republicans in calling for a pause in the scheduled July 1 gas tax increase. “These are the same Democrats who failed earlier this year to suspend this increase when presented the opportunity. Senate Republicans proposed this idea last year, again in January, May, and last week.”

A curious presence at the Democrats’ press conference was Robert Herrell, Executive Director of the Consumer Federation of California. He assured everyone that California gas taxes are much lower here in the state than other parts of the world (See what he did… very shifty). And then he said he is “unwilling to trade California’s cleaner form of gas,” (meaning no cutting July 1 gas tax increase on the summer blend), because it’s for the climate.

He did offer a very sound suggestion to cut the “mystery gas surcharge” of .30 cents which remains a tax on California gas, a holdover from the 2015 Torrence Refinery fire.

He added this zinger at the end: “The current budget proposal is much closer to the Consumer Federation of California position,” as a nod to no relief from California’s high gas taxes. As was announced last week, the California Legislature passed a sham $300 billion budget (just so they wouldn’t lose their pay), with no gas tax relief included in it. And this is even with a $95 billion budget surplus.

“Even Joe Biden now wants to suspend the gas tax. Newsom and the Legislature are officially out of excuses and need to enact my bill immediately,” Assemblyman Kevin Kiley (R-Rocklin) Tweeted. In March Kiley introduced AB 1638 to suspend the 51 cent gas tax for six months. Democrats hijacked his bill, but he’s not giving up.

“Rather than launching a new ‘investigation,’ Governor Newsom and legislative leaders need to immediately suspend our state gas tax, which is almost 3 times higher than the federal tax.”

Kiley added: “A federal gas tax holiday would save drivers over 18 cents per gallon at the pump. If California suspended its gas tax as well, drivers would save an additional 51 cents for a total of nearly 70 cents per gallon in savings. The Penn Wharton Budget Model released last week shows “evidence that recent suspensions of state gasoline taxes in three states were mostly passed onto consumers.”

Click here to read the full article in the California Globe

Lawmakers Pass a Budget, But No Deal Yet on Gas Relief

On Monday, Senate and Assembly Democrats passed their version of the 2022-23 state budget.

While patting themselves on the back for adopting “a budget that puts California’s wealth to work for individuals, families, and businesses throughout our state,” there was one thing missing from their announcement – the support of Gov. Newsom.

Newsom and legislative Democrats are still at odds over how to give Californians some relief in the state budget from record-high gas prices and inflation.

Keep in mind that Monday’s vote was about lawmakers meeting voter-approved requirements that they pass a budget – ANY budget bill – by June 15 to keep receiving their paychecks.

Publicly for now, everyone is making nice.  Senate President pro Tem Toni Atkins and Assembly Speaker Anthony Rendon released a statement on Monday saying “we look forward to working with the Governor in the coming days to ensure we have a responsible budget in place for the start of the fiscal year that delivers prosperity and strengthens the future.”

Senate Budget Committee chair Nancy Skinner, D-Berkeley, told Calmatters “the Legislature is more than 95% in agreement with Newsom.”  Newsom, Atkins, and Rendon literally smiled for the cameras in a photo of their budget discussions tweeted out on Tuesday.

Behind closed doors, Newsom continues to press for his $11.5 billion May Revise plan to give rebates to car owners – $400 per car, for a maximum of $800.  Legislative Democrats want to give out $8 billion in rebates, $200 per taxpayer, limited to those earning under $125,000 a year for individuals and $250,000 for couples filing jointly.

One of the disputes is over how fast Californians would get relief under the competing plans.

As the Sacramento Bee reports, Department of Finance official Erica Li told lawmakers that “while the legislature’s budget includes a very important relief proposal to address these rising costs, as it’s currently structured, it will take longer to implement the smaller $8 billion and will not reach as many Californians when compared to the governor’s $11.5 billion proposal.”

Newsom’s senior advisor for communications Anthony York told Calmatters that Newsom also “remains opposed to massive ongoing spending” in the Legislative Democrat plan, which is ironic given the administration’s proposal for a record $300 billion state budget.

So far, no one is blinking.

Lawmakers and the Governor are likely testing one another’s resolve to see who will give in first.  If history is a judge, the Legislature will ultimately cave.

In 2011, then-Gov. Jerry Brown vetoed a budget that the Legislature’s Democrat majority sent him on a majority vote calling it “unbalanced.”  As the Los Angeles Times reported at the time, “Democratic lawmakers had knowingly flirted with the possibility of a veto by stuffing their plan with the very things that Brown promised he would never sign.”

Brown exercised gubernatorial supremacy and largely dominated every future budget.  Newsom, too, has dominated his first three state budgets.

In an election year, legislative Democrats are now testing the limits of how far they can push Newsom in other areas to get what he wants – delivering immediate relief to struggling Californians.  While he will likely not veto the budget – or even issue a veto threat – his continued resistance to the plans put forward by Atkins and Rendon is further proof that the governor ultimately carries the upper hand in budget negotiations.

While Newsom wants a gas tax relief deal soon, expect the discussions over this and other thorny budget issues to drag into the summer.  Newsom and Legislative Democrats can reach a deal on a companion budget bill with changes to the main budget bill in order to win his signature by June 30, while punting the thorny issues for further discussion.

Click here to read the full article in the Pacific Research Institute

Newsom Signals He’s Open to Excluding the Wealthiest Californians From Gas Tax Rebate

SACRAMENTO — As California drivers continue to grapple with the highest-in-the-nation gas prices, Gov. Gavin Newsom and state legislators remain miles apart on the broad strokes of a proposal to give residents a gas tax rebate.

Newsom recently outlined new details of his plan, however, that suggest he’s open to excluding the wealthiest Californians from receiving rebates, as some Democratic legislators have insisted.

Three weeks ago, Newsom released his highly anticipated proposal to give Californians relief from soaring gas prices, calling for the state to send $400 gas tax refunds to vehicle owners in the form of debit cards, with a maximum of two refunds or $800 for those with multiple vehicles.

But state legislators have floated multiple competing proposals. Some progressives have pushed to prioritize rebates for low-income people, regardless of whether they own a vehicle. Republicans, meanwhile, have demanded the state suspend the gas tax immediately, in addition to giving rebates to drivers.

Newsom’s administration recently unveiled new details of his plan when it sent lawmakers budget bill language to enact his proposal. Here are five key questions to watch as the debate unfolds:

Would high-income drivers be included?

When the governor first announced his proposal, he called for giving refunds to all vehicle owners, regardless of their income. That sparked some criticism from some Democrats who said wealthy drivers don’t need the money.

But Newsom’s latest proposal includes a provision to potentially cap rebates for luxury vehicles valued above a set amount — signaling he’s ready to compromise. The cutoff amount is left blank in the latest bill language.

H.D. Palmer, a spokesperson for Newsom’s budget team, said the blank cap amount reflects that the governor is negotiating with legislators who’ve called for capping rebates.

“Where we end up, we’ll have to see,” Palmer said.

Legislative leaders have floated their own proposal that would provide tax filers a $200 rebate, along with an additional $200 for each dependent. Their plan would exclude high-income earners by capping eligibility at $250,000 in household income, or $125,000 for single filers.

“The Senate’s focus has been getting real relief to people who need it most as soon as possible,” Senate President Pro Tem Toni Atkins, D-San Diego, said in a statement.

Who else might be excluded?

The bill language Newsom’s administration published also outlines another group of people who could be barred from receiving rebates: drivers who have expired tags or owe money to the DMV.

His proposal would limit rebates to only people whose vehicle registration is valid as of April 6, though drivers with expired or suspended registration would have until June 30 to resolve their issues and pay any fees or penalties. That could include fees owed due to delinquent parking tickets.

Newsom’s proposal would also exclude fleet vehicles and vehicles for which the owner has filed a certificate of non-operation with the DMV.

What about transit riders and city dwellers?

Newsom’s push for gas-tax rebates has sparked protests from some mass transit users and environmentalists who said it unfairly excludes people who don’t drive cars.

The Climate Center, a Bay Area advocacy group, chided the plan this week, tweeting, “@GavinNewsom should accelerate California’s #cleanenergy transition, not subsidize the oil and gas industry with rebates.”

California YIMBY, the housing advocacy group, tweeted that gas rebates “are self-defeating — they reduce funding for critical transportation infrastructure. What California’s workers need is more affordable housing closer to jobs.”

Palmer stressed that Newsom’s $11 billion plan, $9 billion of which would pay for rebates, also includes funding for programs that would benefit transit users, cyclists and pedestrians.

“This isn’t just gas- and diesel-centric,” Palmer said. “It is a very balanced package.”

The governor has asked legislators to approve $750 million in grants for rail and transit agencies to make ridership free for three months. Newsom’s office estimated 3 million Californians ride a bus, subway or light rail daily.

In addition, Newsom’s plan includes $500 million in funding for “active transportation programs,” such as projects to expand bike lanes or make streets more pedestrian-friendly.

The governor also proposes the state fast-track spending $1.75 billion of his $10 billion budget for electric cars, so more money for buyer incentives and to build charging stations could be used in the coming year.

Click here to read the full article at the SF Chronicle