Newsom Wants To Send $400 Debit Cards To CA Car Owners

CALIFORNIA — Gov. Gavin Newsom announced a plan to send every registered vehicle owner a $400 debit card to offset skyrocketing prices. The governor also wants to freeze the gas tax increase that's set to befall Californians this summer.

Californians could get a maximum of $800 per vehicle, for those who own two vehicles. Direct payments would come in the form of a tax rebate. Pausing the inflationary adjustment to the gas tax would cost $523 million.

The package also includes $500 million to bolster "active transportation" projects to promote biking and walking in the state.

Newsom is also seeking $750 million to fund three months of free public transit for commuters. In total, the proposal will cost $11 billion.

"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," Newsom said in a statement. "But this package is also focused on protecting people from volatile gas prices, and advancing clean transportation – providing three months of free public transportation, fast-tracking electric vehicle incentives and charging stations, and new funding for local biking and walking projects."

Californians could see payments as soon as July if the Legislature is able to make an agreement with Newsom's administration. Several lawmakers have unveiled completing proposals to address the gas price crisis in California.

Payments would go to drivers regardless of whether they own a gas or electric-powered vehicle, Politico reported.

One proposal was shot down last week, when Republican legislators failed to garner enough votes Monday to trigger an immediate gas tax holiday in California.

Assemblymember Kevin Kiley (R-Rocklin) introduced the gas tax holiday measure, but both houses of the Legislature rejected it.

"To cut the state gas tax in its entirety, that'll save Californians 51 cents a gallon," Kiley said, according to ABC10. "Now that's not going to bring gas prices down to reasonable levels by any stretch of the imagination. But it'll help."

Legislators have expressed support for a $400 gas rebate in recent weeks.

"Soaring gas prices are hitting Californians at the pump — we know our constituents are hurting right now," Assemblymember Cottie Petrie-Norris (D-Irvine) said at a Thursday news conference. "To put that into context, for most vehicles, for most Californians, this $400 rebate is equivalent to a one-year gas tax holiday. We know too many Californians are struggling to make ends meet right now."

The bill would use the state's $31 billion budget surplus to pay for the rebate, which Petrie-Norris said would cover one year's worth of 51.1 cent per gallon gas taxes on weekly fill-ups of a car with a 15 gallon tank. California's gas tax is the second-highest in the nation, according to The New York Times.

Earlier this month, a Mendocino gas station reportedly charged $8.45 for a gallon of regular gas, the highest recorded price in the nation. While prices have slowed somewhat, that was little comfort to strapped drivers who were also dealing with nearly 8 percent inflation, the highest in decades.

READ MORE: CA Gas Tax Holiday Fails As Prices Inch Up

In the Golden State, the average prices for regular gas was $5.87, up by one cent from the previous day, according to AAA.

One month ago, the average price for a gallon of regular gas was $4.75.

What's more, the price California residents paid to take a ride or order food through Uber and Lyft also went up. To offset rising gas prices for California Uber drivers, the ride-sharing and food-delivery companies said they will impose a temporary surcharge on customers, which began last week.

Prices were expected to level off this month and have already been showing signs of slowing their ascent.

Patch Editor Michael Wittner contributed to this report.