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Newsom's Gas Rebate Plan Will Send Up To $800 To California Car Owners

SACRAMENTO (CBS SF/AP) — Gov. Gavin Newsom unveiled his gas rebate plan Wednesday, which would send Californians who own cars up to $800 from the state to help offset record high gas prices.

Registered owners would get $400 per vehicle, capped at two vehicles. People who own electric vehicles or others that don't use gasoline would qualify. But most businesses with fleets of vehicles would not be eligible.

Newsom says the rebates would cost the state about $9 billion.

"That direct relief will address the issue that we are all struggling to address and that's the issue of gas prices," he said.

Regular grade gas is a state record $5.88 per gallon in California, highest in the nation and about $2 more than a year ago, according to AAA.

For people who don't have cars, Newsom wants the state to pay for their bus or train fare for three months. His proposal would give $750 million to transit and rail agencies, which Newsom said would be enough to give free rides to 3 million people per day.

Another $600 million would pay for a "pause" for part of the state sales tax on diesel fuel for one year, plus an other $523 million to halt a scheduled increase in the state's gas tax this summer.

Additional details on the plan are available on the governor's website.

The state's elected leaders have been debating for weeks what to do about the spiraling prices. Republicans, who are far outnumbered in the state Legislature, want to suspend the state's gas tax, which at 51 cents per gallon is the second highest in the nation.

But Democrats said that would benefit oil companies. Instead, they favor giving rebates to taxpayers because they know it would go straight to the consumer.

Cedric Scarvers, a San Mateo resident, told KPIX 5 he thinks the proposed rebate will be beneficial.

"I think it's a great thing. I know there are a lot of people hurting right now," Scarvers said. "I can definitely appreciate that. Myself and my girlfriend – we have two cars. So, that is definitely something we'd definitely be about."

Hillsborough resident Theresa Ma wasn't thrilled to spend $60 to fill up two-thirds of her tank on Wednesday afternoon, but says she believes Newsom's proposal is a short-term fix for a long-term problem.

"They should try to bring up the economy situation here, instead of keeping giving people money to solve a little problem and create a bigger problem," Ma said. "It's a long-term problem."

Newsom's plan must be approved by the Legislature. Democratic leaders already have said they don't support any proposal to temporarily halt an increase in the state's gas tax. And many Democrats don't like the idea of giving money to everyone, including millionaires and billionaires. They prefer targeting rebates to certain income levels.

Political analyst Jessica Levinson told CBS News that climate is also a concern. "Democrats in the legislature are concerned because it's not necessarily a climate change friendly proposal and they're worried that when we're giving people who drive cars rebates. Again, regardless whether or not it's an electric car, a hybrid car or a typical gas guzzler so to speak, they're worried that we need to tackle that now along with the economic issues," Levinson said.

Max Darrow and Katie Nielsen contributed reporting.

© Copyright 2022 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.

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