President Joe Biden on Wednesday urged Congress to suspend the federal gasoline tax for the summer and then asked states to do the same – or find other ways to ease the pain of consumers experiencing excessive price increases.
Biden’s announcement adds pressure to California leaders, who have waived the state’s gas tax holiday and whose proposed alternatives to refund some of the cash rebate to consumers are unlikely to emerge until the fall.
But it was unclear whether a call by their own party president Newsom and the Democratic-controlled legislature would reconsider suspending the 51-cent-per-gallon state tax for several months, as Republican lawmakers had proposed, or at least move faster. some other relief for drivers who watch their hard-earned dollars flow into their gas tanks at over $6 a gallon.
Newsom and Democratic lawmakers have repeatedly dismissed the idea of a state gas tax exemption, arguing that there will be no guarantee that companies will pass the savings from the deferred tax to consumers. But the proposed gas tax suspension in California and many other states includes language that requires savings to be reflected in pump prices.
Assemblyman Kevin Kiley, a congressional candidate whose proposal to suspend California’s gas tax is gathering dust, said Wednesday that “the data shows that out-of-state gas tax holidays are providing real savings to consumers.”
“Even the President now finally recognizes that this is the best way to help families in need,” Kylie said in a statement. “Instead of launching a new ‘investigation’, Governor Newsom and legislative leaders should immediately suspend our state gas tax, which is nearly three times the federal tax.”
Assembly Speaker Anthony Rendon, D-Lakewood State, has not commented on the topic of gas prices since Monday, when he announced the formation of a special commission on gasoline supply and pricing to look into alleged speculation in the oil and gas industry.
On Wednesday, Rendon’s office said only that “the Legislature has proposed a plan to provide consumer assistance through rebates, and they are actively negotiating with the governor about it.”
But Golden State motorists may be getting impatient. California retail gasoline prices averaged 6.371 gallons per gallon Wednesday, according to the AAA, significantly higher than the national average of $4.955. The cost of automotive fuel in the state consistently exceeds national prices because California has one of the highest gas taxes in the country, and it also requires a special gas blend to reduce smog that is not used in other states, limiting supply.
Biden’s approval plummeted due to mishandling of the COVID-19 pandemic, shortages of infant formula, inflation and soaring gas prices. A Morning Consult poll on June 8 showed that 58% of voters disapprove of Biden’s performance, while 39% approve, the lowest mark for his presidency.
Biden wants Congress to suspend the 18.4 cents a gallon federal gas tax for 90 days, though it’s unclear what will happen on Wednesday. He also demanded that states suspend their own gas taxes, which he says average 30 cents a gallon. California’s 51.1 cents per gallon gasoline tax is due to rise 2.8 cents on July 1. Newsom proposed freezing the increase, but Democratic lawmakers rejected the idea.
Biden spoke of several states that have already suspended their gas taxes or introduced other incentives to help consumers. Connecticut Gov. Ned Lamont, also a Democrat, signed a bipartisan bill suspending the 25-cent gas tax until at least June.
New York also suspended the 16-cent gas tax from June 1 until the end of the year. Illinois froze the state’s 39.2-cent gas tax, which was due to rise 2.4 cents on July 1 through the end of the year. Colorado has deferred the 2-cent-per-gallon fee, which was due to take effect July 1, until April 2023.
Maryland suspended the 36.1 cent gas tax from March 18 to April 16, and Georgia canceled the 29.1 cent gas tax from March 18 to May 31. Florida plans to eliminate the 25.3 cent gas tax from October 1 to October 31.
A June 15 report from the University of Pennsylvania found that gas tax holidays in Maryland, Georgia, and Connecticut “at one point during the tax holiday largely shifted to consumers.”
State Democratic lawmakers are calling for an $8 billion plan that would send $200 checks to taxpayers for up to $125,000 through the Franchise Tax Board with an additional $200 for each child or other dependent.
But Newsom criticized the plan as insufficient and too slow, with relief not coming until perhaps October. He proposed that the Department of Motor Vehicles send California motorists $400 for each vehicle they own — up to $800 for two vehicles — for a total of $11 billion in rebates. He also called for grants to allow travel agencies to provide free rides for three months. Newsom said his proposal could potentially bring relief in the summer.
“Gov. Newsom agrees that Californians need help with rising costs for everyday expenses such as gas,” Newsom’s office said Wednesday. “That’s why he advocates immediate direct payments to California families who are feeling the brunt of inflation in everything from gasoline to groceries.”
Assemblyman Vince Fong, R-Bakersfield State, a member of the Assembly Budget Committee, complained Wednesday that state Democratic leaders have allowed cuts in California oil and gas production that could increase supply and lower prices, while hesitant to cut prices. for pumps.
“I’m disappointed with what’s going on right now because there’s a lot of political theater here,” Fong said. “Negotiations on the budget are ongoing. The Governor and Legislative Democrats recognize that speed and urgency are among the most important criteria for assistance. But, on the other hand, none of their proposals brings immediate relief.”