About 23 million eligible Californians could pay up to $1,050 each. California drivers pay US gasoline prices as the average price for a gallon of gasoline is $6.32.
Millions of California taxpayers can get thousands of dollars to help combat the high cost of gas and other goods.
The money will be distributed once California Governor Gavin Newsom and legislative leaders reach an agreement on the 2022-23 state budget framework, Newsom’s office announced Sunday.
The governor’s office said that about 23 million eligible Californians could receive payments of up to $1,050 each as part of a $17 billion inflation relief package.
“California’s budget is addressing the state’s most pressing needs and prioritizing putting dollars back in the pockets of millions of Californians struggling with global inflation and rising prices of everything from gas to groceries,” Newsom, Senate President pro-Tempore Toni G. Atkins, and Assembly Chairman Anthony Rendon said in the release.
The deal comes as California drivers face the highest gas prices in the nation, as the average price for a gallon of gas in the state Monday is $6.32, according to AAA, nearly 30% higher than the national average. Newsom first proposed a gas tax refund in March.
Georgia and Maryland have both passed bills to stop their state taxes on gas.
California’s new agreement also includes a suspension of the state tax on diesel, which has risen to $7 throughout California, according to AAA, and additional funds to help residents pay their rent and utility bills, state officials added.
Taxpayers will receive a portion of California’s record $97 billion surplus, as the money will only go to residents who earn a certain amount each year.
As part of the plan, state officials reached a compromise as the money goes to taxpayers rather than just vehicle owners, as the checks will be bigger than the legislative leaders initially proposed.
Lower- and middle-income Californians are likely to receive the most assistance. The less money these residents earn annually, the more they will receive for gas incentives from the state.
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For example, single taxpayers earning less than $75,000 a year and couples filing jointly earning less than $150,000 a year will receive $350 per taxpayer. Taxpayers with dependents get an additional $350.
This means that a couple who earn $125,000 together and have two children will be eligible for $350 per adult plus $350 for their children, for a total of $1,050.
Meanwhile, higher-earning residents get less under the deal. Single taxpayers earning between $75,000 and $125,000 per year and couples earning between $150,000 and $250,000 will receive $250, plus the same payment for their dependents, for a maximum of $750 per family.
Singles earning between $125,000 and $250,000 and couples earning between $250,000 and $500,000 annually would receive $200, plus the same amount for their family members. That equates to a maximum benefit of $600 per family.