Newsom wants tax rebate, touts ‘California Way’ of governing

California Gov. Gavin Newsom proposed a tax rebate Tuesday amid record-high prices at the pump but rejected calls to increase oil drilling, saying he wants to free the state "once and for all from the grasp of petro-dictators."

The average price for a gallon of gas in California is the nation’s highest at $5.44, according to AAA. Newsom announced the rebate in his annual State of the State address but provided no specifics, saying he will work with legislative leaders "to put money back in the pockets of Californians to address rising gas prices."

A spokesperson said the rebate would total in the billions and could occur before Newsom submits his revised budget proposal in May.

In a wide-ranging address, Newsom also warned that authoritarianism isn’t just rising overseas, using his election-year speech to offer "a California Way" as the antidote to what he called the "agents of a national anger machine."

Newsom, a Democrat who handily beat back a mid-term recall campaign last year, also touted his administration’s progress on homelessness, the economy, education and climate change in a speech to assembled lawmakers in an auditorium. By contrast, last year’s speech — given mid-pandemic — was delivered outdoors in an empty Dodger Stadium, which was being used as a mass-testing site.


This year, coronavirus case numbers and hospitalizations are plummeting and the nation’s attention is drawn to the Russian invasion of Ukraine and the accompanying spiraling gas prices. Republicans nationally and in California want to see the Biden administration increase drilling. Newsom rejected that call.

"Drilling even more oil," he said, "only leads to even more extreme weather, more extreme drought, more wildfire."

"We need to be fighting polluters, not bolstering them," Newsom said. "And in the process of so doing, freeing us once and for all from the grasp of petro-dictators."

As he did throughout the speech, Newsom offered "California’s leadership" as the alternative, calling clean energy "this generation’s greatest economic opportunity."

California is one of the nation’s most oil-rich states and Republicans, who are a small minority in the Legislature and hold no statewide offices, see high gas prices as an election year issue they can exploit. California taxes gasoline at 51.1 cents per gallon, second only to Pennsylvania, according to the Federation of Tax Administrators.

"Gas prices are out of control. Let’s suspend the gas tax, stop using foreign oil and focus on energy independence policies that don’t place new burdens on working families," said Republican Assemblymember Suzette Martinez Valladares, who issued the Republican "prebuttal" to Newsom’s speech. "We must end the energy policies that punish Californians while rewarding countries like Russia and China for their bad behavior."

Newsom has proposed pausing a slight increase in the state gas tax scheduled to take effect this summer. But Democratic leaders in the Legislature have balked at that proposal, arguing it would make it harder to maintain the state’s roads while only providing barely noticeable relief at the pump.

The governor otherwise has been pushing to wean California, famous for its car culture, from the internal combustion engine.

Newsom has ordered the state to ban the sale of new gas-powered cars by 2035 and halt all in-state oil drilling by 2045, a move some Republicans argue will only increase the state’s reliance on foreign oil.

Newsom’s administration has not approved a permit for the oil extraction process known as hydraulic fracturing since February 2021, even though Newsom hasn’t ordered an end to the practice until 2024.

The state began permitting the process of extracting oil and gas in 2015. Last summer and fall, the state’s Geologic Energy Management Division, known as CalGEM, rejected 50 permits solely on climate change concerns. That approach is being challenged in court by the Western States Petroleum Association.

Meanwhile, in 2019 and 2020, the state abandoned nearly 4,000 oil and gas wells, meaning they are no longer productive. But Newsom’s administration didn’t halt the drilling of new oil and gas wells during that period — more than 2,600 wells were drilled. Just 243 wells were drilled in the first nine months of 2021, according to preliminary state data.

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Newsom also punched back at Republicans blaming Democratic policies for rising crime. He said California is funding increased crime-fighting efforts but will not "revert to heavy-handed policies that have marked the failures of the past."

Newsom began and ended his speech as if addressing a national audience as he decried developments elsewhere while promoting California’s efforts at "finding new solutions to big problems." Democracy is in danger, Newsom warned.

"While we might not have strongmen literally waging war in our country, we are plagued by agents of a national anger machine, fueling division, weaponizing grievance," he said. "Powerful forces and loud voices — stoking fear and seeking to divide us, weakening the institutions of our democracy."

He offered as an alternative California’s history of "expanding the horizon of what’s possible."

"We know that government cannot be the entire solution, but we also know that government has always been part of the solution," Newsom said.

He said governments’ goals should include promoting the private sector, encouraging diversity and "unifying toward common purpose."

Polls routinely show homelessness as one of the most pressing issue for California voters. The state has the largest homeless population in the nation and Newsom has budgeted a record $12 billion for various programs and initiatives but encampments still proliferate.

In his speech, Newsom touted his plan unveiled last week to create new Care Courts in each county that could force those with mental health issues off the street and into treatment.

And he bragged about California’s rapid recovery two years after he put the state’s economy into a tailspin with the nation’s first stay-home order in response to the pandemic.

"When it comes to the economy, California is unmatched," he said. "But you know what makes us so different than those states? ... It’s that as our businesses grow, we don’t leave our workers behind. ... That’s the California Way."

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