The Californian government is mulling over a new measure that aims to provide cash subsidies to residents to help offset increasing fuel prices. California Governor Gavin Newsom said Wednesday that car owners in the state could get as much as $800 if the proposal is approved.
Under the proposal, registered vehicle owners in California would get up to $400 per vehicle, with each individual capped at getting a maximum of $800. Residents who own electric vehicles will also qualify for the planned subsidy. Businesses with fleets of vehicles will unfortunately not be eligible.
The planned subsidy program is expected to cost the state around $9 billion. Newson said that if the proposal is approved, the first payments to residents could be given out as early as July. The governor added that the direct cash relief should help address the issues plaguing Californians as a result of the record-high gasoline prices across the state.
Newsom wants the state to pay for the bus or rail fares of those who do not own cars for three months. Newsom's proposal would send $750 million to transportation and rail agencies, enough to provide free trips to 3 million people every day.
Another $600 million would be used to put a one-year "hold" on a portion of the state sales tax on diesel fuel, as well as $523 million to postpone a planned hike in the state's gas tax this summer.
For weeks, the state's elected officials have been discussing what to do about the rising prices. Republicans in the state Legislature, who are vastly outnumbered, want to suspend the state's gas tax, which is now $0.51 per gallon - the second highest in the U.S.
Regular grade gasoline in California costs an average of $5.88 per gallon, the highest in the U.S. and about $2 more than prices more than a year ago.
Democrats are against suspending the state's gas tax, which they argued would benefit only large oil companies. Some Democrats have proposed giving rebates to taxpayers as it would have more impact on consumers.
The Legislature has to approve Newsom's plan before it can be implemented. Democratic leaders have already stated that they will oppose any attempt to suspend the state's gas tax hike temporarily. Many Democrats are also opposed to the concept of handing out money to everyone, even billionaires and millionaires. They wish to limit refunds to people who earn a particular amount of money, proposing that cash relief must only be given to people in specific income brackets.
