With gas prices skyrocketing in California, Gov. Gavin Newsom announced Wednesday that he is proposing sending $400 direct payments to all vehicle owners in the state.
The governor’s proposal calls for $9 billion in tax refunds being sent directly to Californians.
“We’re taking immediate action to get money directly into the pockets of Californians who are facing higher gas prices as a direct result of Putin’s invasion of Ukraine,” the governor said in a statement.
The average price of a gallon of gas in California stood at $5.88 Thursday. In the Los Angeles area, the price has already topped $6 following weeks of daily increases.
The Governor’s office estimates that the California driver spends approximately $300 in gasoline excise tax over a year.
Here’s what to know about Newsom’s proposed payments:
The $400 payments would go to all registered vehicle owners in California. That includes motorcycle owners.
It doesn’t matter what each person’s income level is. Officials said the proposal does not have an income cap in order to include all Californians dealing with high gas prices.
Also, eligibility is based on vehicle registration, not tax records, so it can include seniors who receive Social Security Disability income and low-income non-tax filers.
Under this plan, tens of millions of Californians would get the payments, Newsom said.
Undocumented immigrants are also eligible, if they have a registered vehicle, according to the governor’s office.
How would I receive the money?
The tax refund will take the form of $400 debit cards for registered vehicle owners.
What if I own more than one vehicle?
Californians who have more than one vehicle registered to their name would get a debit card with $800. That’s because the payments are capped at two vehicles per person.
So families with several cars registered to different family members would get more payments.
When could I get the the payment?
The Newsom administration will meet with the Legislature to negotiate the details of the proposal in the coming days, according to the governor’s office.
If the package is approved through the Legislature, the first payments could begin as soon as July, officials said.
What else is in the relief package?
The $400 payments are part of an $11 billion relief package that also includes $2 billion for:
- Grants to transit and rail agencies to provide free transit for Californians for 3 months. This would mean that millions of Californians who take the bus, subway, or light rail won’t have to pay a fare every time they ride.
- Pausing a part of the sales tax rate on diesel for one year.
- Pausing the inflationary adjustment to gas and diesel excise tax rates.
The package also calls for $500 million for projects that promote biking and walking throughout the state.