Some 23 million residents of California who earn less than $250,000 a year will receive a check from the state government to help ease the burden of inflation which has sent prices of key commodities like food and gas soaring.
California Gov. Gavin Newsom and the Democratic-controlled legislature reached agreement last week on a $17 billion plan to provide relief to struggling residents who are paying some of the highest gas prices in the nation.
“Millions of Californians will be receiving up to $1,050 as part of a NEW middle class tax rebate,” Newsom tweeted on Monday.
“That’s more money in your pocket to help you fill your gas tank and put food on the table.”
Consumer prices surged 8.6% last month from a year earlier, faster than April’s year-over-year increase of 8.3%. The new inflation figure is the highest since 1981.
Millions of Californians will receive either direct deposits to their bank accounts or debit cards from Sacramento, according to Politico.
The plan calls for those earning less than $75,000 to receive $350. Joint filers who earn a combined $150,000 or less would get $700 as well as an additional $350 if they have dependents.
The most anyone can hope to receive is $1,050.
Those who earn $125,000 or joint filers with combined earnings of $250,000 will receive $250 or $500 combined, as well as an additional $250 for dependents. Payments for earners in that tax bracket would be capped at $750.
Californians who earn more than $250,000 or $500,000 when filing jointly would each receive $200 plus an additional $200 for one dependent for a maximum of $600.
The most recent state budget calls for a $47 billion multi-year infrastructure and transportation package as well as a pause in state diesel sales taxes for a year beginning on Oct. 1.
But there will be no pause to the gasoline tax, which is expected to increase on July 1.
As of Tuesday, the average price of a gallon of gasoline in California is $6.31 — the highest in the nation, according to AAA.
In some areas of the state, including Alpine and Mono counties near the border with Nevada, the average price of a gallon of fuel ranges between $7 and $8.
Californians pay more for fuel due to the state’s gasoline tax, which accounts for around 40% of the cost. Motorists in the Golden State are charged an extra 51.1 cents per gallon — the second-highest gas tax in the country after Pennsylvania, according to the Federation of Tax Administrators.
The state is planning to increase that tax starting July 1, when it will hit 53.9 cents per gallon — a 5.6% hike. State officials say the gas tax hike is necessary to keep up with inflation.
California gas is also costlier due to the state’s regulatory programs aimed at combating climate change. Those programs add an additional $1.27 to the cost of a gallon of gas, according to data cited by The New York Times.
The state’s gas is also more expensive because California needs to import most of its fuel, primarily from Alaska or other countries such as Ecuador, Saudi Arabia, and Iraq. California has no interstate pipelines that carry gas into the state.
Bringing in gas via ship or truck is more costly.