Californians will get tax refunds of up to $1,050 this fall, thanks to a tentative deal between the governor and the Legislature.
The plan would give larger refunds to households that earn less money and include an additional payment for dependents.
The timetable for getting money back in people's pockets was delayed due to disagreements among Democrats at the state capitol. If the Legislature approves the fuel refunds next week, they won't go out until October.
A larger state budget agreement is expected to be announced soon. Funding priorities of California's Democratic leaders include more funding for K-12 education, COVID-19 bonuses for healthcare workers, money to address wildfire, and expanded access to abortion services.
The issue of how to spend the state's surplus tax revenues has been at the center of the debate between Newsom and lawmakers. The sides didn't agree on how much they should get in refunds.
After giving up his attempt to tie refunds to vehicle ownership through the Department of Motor Vehicles, he agreed with a plan to send direct deposits and debit cards to taxpayers. The income cap of $250,000 for individual taxpayers and $500,000 for joint filers was more than double what the Senate and Assembly had originally proposed.
The plan would give refunds on a sliding scale.
A person with an annual income of up to $75,000 would get a $350 refund, which would double to $700 for joint filers. If a household claimed any dependents, they would get an additional $350 payment.
If you earn up to $125,000, you'll get $250 refunds. $500 would be given to households that file with each other. Families in the income brackets would be eligible for as much as $750 if children or any other dependents qualify for an additional $250 payment.
Individuals who earn up to $250,000 would get $200 and joint filers with income of $500,000 would get $400. Households with dependents would be eligible for a maximum of $600 in the income brackets.
The budget plan and refunds will be voted on by the Legislature next week.
A framework that included their initial proposal to provide $8 billion in tax refunds was included in a preliminary state budget plan last week.
To avoid forfeiture of their paychecks, lawmakers passed the preliminary budget. They didn't get a deal with the governor on the spending plan and were expecting a lot of changes this week.
The Legislature's initial plan would be increased by 1.5 billion dollars.
In March, the governor presented an $11 billion proposal to give drivers a break. Many lawmakers want more state funding to be directed to infrastructure projects and improvements in their districts, so they offered various ideas that cost less than Newsom's proposal.
In the middle of an election year and at a time when inflation and interest rates are on the rise, the effort to reduce the sting of gasoline prices is made.
The average price for a gallon of gasoline in California was $6.34 as of Friday, according to the American Automobile Assn. The state average fell from a record-high last week but is still above the national average.
President Biden asked Congress to suspend the federal gas tax in an effort to bring down gas prices. States should suspend fuel taxes in order to further reduce prices.
Republicans in California have criticized Democrats for not taking swift action to reduce the cost of gas and for not suspending the excise tax on fuel.
Assembly Speaker Anthony Rendon wants to know if oil companies are ripping off drivers. The leader of the Democrats said he would set up a select committee to look at more than just gas prices.
An earlier investigation by the California Energy Commission found that big corporate gas stations charged higher prices for what appeared to be the same product, and raised the possibility that competing oil companies were illegally price fixing.
The story was originally published in the LA Times.
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