California has billions to spend on cutting gas prices – and no bailout deal

Nor have legislative leaders who want to send money to low-income residents, including those who don’t own cars, stand still.

The governor promised in a speech in early March that he was taking “immediate action” to help. In the middle of June, when the price of gasoline exceeds $6 per gallon – highest in the country “The Californians are still waiting.

“I am baffled and disappointed that months later nothing has happened and we have not received a single dollar in any pocket,” said Assembly Member Kotti Petrie Norris (D-Laguna Beach), representing part of the ongoing battlefield in Orange County and was part of a group of moderate Democrats who put forward an alternative proposal this spring. “I think Californians are very angry about what they see as inaction and what they perceive as indifference.”

The dispute in Sacramento leads to vast socio-economic divisions and paradoxes in an expensive state known for its powerful economy and progressive politics. The unrestricted economic success of California’s richest people has led to record government budget surpluses, even as soaring prices are taking a heavy toll on millions of people who are already struggling to keep afloat.

California’s ability to close this gap could influence the midterm elections at a time of growing economic turmoil. It could also affect Newsom’s political outlook, as the Democratic governor, all but certain of a re-election, hopes to bolster other Democrats on the ballot while working to boost his profile as the national Democratic leader.

Newsom, who has called for a gas-powered car ban by 2035, now wants to provide economic relief to car owners – with doubling the cash for those with two. (The governor expressed his willingness to exclude luxury cars from aid, but did not set a maximum cost.)

The Governor’s plan will return $11.5 billion to Californians, and the Legislature’s plan will return $8 billion. Newsom argued that limiting aid to those earning less than $125,000 a year, as Democratic lawmakers want to do, would freeze some middle-class residents. But legislative leaders are adamant that aid should go to the Californians who need it most.

“We’re not going to give Elon Musk or anyone else $400,” said a Democratic Party official who spoke in the background due to the sensitivity of the negotiations. “That will never happen under this Democratic Legislature.”

Lawmakers want to tie help to individuals with additional benefits for dependents — $400 for a family of two, $1,000 for a family of five. Newsom never backed down from his public stance that it should be about owning a car, offering $400 for the car.

Another stumbling block is how to withdraw money. Newsom argued that going through the Department of Motor Vehicles would be faster than relying on another overworked government agency chosen by the Legislature, which was still receiving stimulus checks from last year’s budget this year as well.

In other words: the debate about the fastest way to pay people delayed the deal to pay people.

“It’s the size, scope and speed. These are the three issues we are focusing on,” said Anthony York, a spokesman for Newsom. “If it had been done 100 days ago, we would have been 100 days closer, but the Legislature didn’t want to do it outside of the budget process.”

Budget negotiations almost always take months. But Newsom “probably rushed” by announcing in March that help was coming, said Chris Hoen, executive director of the progressive California Center for Budget and Policy.

“The checks weren’t going to be cut in the next three weeks after this announcement, but it certainly created an expectation for something faster,” Höhne said. “They announced a plan that didn’t have many details, didn’t have many outlines, they didn’t test it in the Legislative Assembly.”

But the lack of compromise was striking, and both sides dug in for months. Newsom first offered help in his State of the Union address in early March, after which the aide introduced the car tie-in. Shortly thereafter, the legislative leaders made their counteroffer.

“I’m sure we’ll come to an agreement very, very quickly,” Newsom told reporters more than a month ago.

On Monday, Speaker Anthony Rendon (D-Lakewood) said he expects relief checks to start being distributed “before October,” which could mean that money and general election ballots will be in voters’ mailboxes around the same time. time.

As the stalemate continued, Republicans, who hold little power in an overwhelmingly Democratic parliament, have tried to capitalize on the dispute by repeatedly trying to force votes to suspend the state’s gas tax.

Democratic lawmakers also rejected Newsom’s proposal to delay a planned 3-cent hike due to take effect July 1. They argue that blocking gas tax revenues will deplete transit projects and undermine construction jobs with no guarantee that oil companies will transfer savings. consumers. Progressive representative of Silicon Valley. Ro Khanna reiterated that argument this week, warning that the focus on tax repeal “feeds the far-right narrative that the problem is with the government, not that big oil is cheating consumers.”

Many Democrats in Sacramento instead, they focused on a thorough analysis of the profits of oil companies. They amended the GOP gas tax suspension law to instead introduce a new contingency tax on oil companies. Rendon and other Democrats this week called on state officials to investigate why prices rose so quickly.

But some Democrats continue to push for immediate tax cuts, including arguing that the final budget agreement should include gas tax holidays in the budget agreement. The debate took a new turn this week when President Joe Biden called for a suspension of federal gas taxes and urged states to follow suit. Some legislative Democrats have praised Biden, while Republicans have seized on the emergence of Democrats.

“The US president and secretary of the treasury see the benefits. Why are Sacramento Democrats so reluctant to provide immediate relief?” This is stated in a statement by Senate Republican leader Scott Wilk (R-Simi Valley).

The governor’s approach to focusing on cars has baffled some observers, in part because it appears to run counter to the state’s aggressive climate change goals.

“Money for families should not come at the expense of protecting the planet,” Democratic Assemblyman Isaac Bryan (D-LA) wrote last week.

Melissa Romero, senior legislative manager for California Green Voters, said the exemption from car ownership could help struggling Californians and meet the state’s broader climate goals.

“Here is a real opportunity to make sure we target and focus aid to the people who need it most, as well as not deepening government dependence on polluting fossil fuels, and rewarding the oil industry at a time when they are seeing record profits.” Romero said.

The desire for relief and the lack of an immediate response from the state have helped Republicans brandish a political club in an election season that includes numerous contested races in California and pervasive worries about inflation. Republican lawmakers recently gathered at the Capitol to mark 100 days since Newsom promised help.

“We’re as upset as any Californian who is facing the full impact of rising spending,” said Assemblyman Vince Fong (Bakersfield), the Assembly’s chief Republican budget officer. “The Democrats control every aspect of government, so it makes me very upset and strange that they can’t come to any agreement.”

It’s not just Republicans who are demanding something happen. A group of moderate Democrats led by Petrie-Norris preempted the legislature’s leaders in March by submitting their own proposal, arguing that they should not wait for the budget process to complete. A growing number of Democrats are also opposing the leadership, pushing for a suspension of the state’s gas tax, which is now 51 cents a gallon, or for postponing a planned increase, effectively aligning itself with the Republicans or Newsom.

“California gas prices could jeopardize the majority in the House of Representatives. I think it will have serious consequences,” Petri-Norris said in an interview. “It looks like a political mistake when we raise gas prices when they are as high as they are now.”

Several Democrats opposed to gas taxes face competitive elections. Among them, the front-line rep. Josh Harder and Assemblyman Adam Gray (D-Merced), who are vying for new House seats in the state’s Central Valley, and Assemblyman Rudy Salas of Bakersfield, who is challenging the Republican Party representative. David Valadao and this week urged Newsom and the Legislature to block a gas tax increase.

“People go about their daily lives and they don’t spend every minute on the finer points of Sacramento policy making, but it’s clear that voters want us to take action,” Gray said. “That’s what people will think about when they go to the polls, and that’s why I keep going there and advocating for action.”

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