PD Editorial: State gas relief proposals miss the mark

With prices still hovering around $6 a gallon, gas pump dials spin like slot machines. But nobody, except oil companies, feels like a winner. Inflation is pushing up prices for food and other essentials. Who wouldn’t like to have a few extra bucks?

With another multibillion-dollar surplus, it’s a matter of when rather than if California will give tax rebates this year. There already are four proposals to ease the bite of high gas prices. Unfortunately, each of them is flawed.

Republicans in the state Legislature called for a gas tax holiday, but there are good reasons to find a better approach. For starters, there is no guarantee any savings would be passed on to consumers.

Besides, the state’s 51-cents-a-gallon tax on gasoline is the primary source of money for road and bridge repairs in California. In 2018, voters soundly rejected a GOP-backed attempt to roll back the gas tax and overwhelmingly approved a constitutional amendment earmarking gas tax revenue for roads and transit.

A six-month tax holiday might save motorists $6 or $7 on a tank of gas, but at a cost of billions for repaving roads, repairing potholes and other badly needed maintenance.

Three relief plans are sponsored by Democrats, and each leaves something to be desired.

The first, put forth by about 20 legislators, would send $400 to every taxpayer, regardless of their income. The rationale: a $400 check would cover a year’s worth of gas taxes for an average California motorist.

On the plus side, this plan doesn’t shortchange road repairs, and it would put money in the pockets of people who don’t drive but are stuck paying more for other essentials. However, it doesn’t distinguish between affluent Californians with a lot of discretionary income and working-class families who spend a large percentage of their income on inflation-sensitive basics such as food, gas, electricity and child care.

Democratic legislative leaders would send $200, plus $200 for each dependent, to individuals earning up to $125,000 and $250,000 for couples. That’s better than no cap, but it’s almost triple the $75,000 income ceiling in 2021 for state COVID stimulus payments. Two-thirds of California households qualified for stimulus payments; about 90% would get a check under the Democratic leaders’ plan.

Gov. Gavin Newsom’s proposal, unveiled Wednesday, ups the ante. He wants to send $400 debit cards to the registered owner of every vehicle in the state.

Like the rank-and-file lawmakers, Newsom proposes no means testing. You get the same amount whether you drive a shiny new Rolls-Royce or a 1964 Volkswagen Bug — or even an electric car that doesn’t burn any gasoline. A grant program to subsidize public transit fares is the only benefit for anyone who doesn’t own a car.

California can afford to offer tax relief because of a budget surplus that’s expected to top $45 billion. Indeed, for a second straight year the state will exceed the Gann limit, a voter-approved revenue cap that can trigger tax rebates.

Sending a check to everyone regardless of income is good politics — especially in an election year. But California is a state with both great wealth and great poverty. Newsom and state lawmakers took that into account with last year’s rebate, which targeted stimulus payments to middle- and working-class residents. These are the people least able to afford higher prices for gas and other essentials. State leaders should put them first again.

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