What gas tax rebate? Lawmakers reach deal on "inflation relief" payments for 23 million Californians

The much-discussed California gas tax rebate has morphed into "inflation relief," according to a new plan announced by lawmakers.

An agreement on the framework of the 2022-23 budget was reached Sunday night and includes giving 23 million Californians direct payments of as much as $1,050. The payments would be issued via direct deposit refunds or debit cards.

The deal also suspends the state's diesel sales tax for 12 months, starting on Oct. 1. The diesel sales tax is currently 23 cents per gallon.

Gov. Gavin Newsom's original plan was to tie the payments directly to vehicle registrations. Under that now-shelved plan, California vehicle owners would have received $400 per vehicle registered in their names, up to two vehicles per person, and millions in grants to make public transit free for three months, pause a part of the diesel sales tax rate for a year, and pause the inflationary adjustment to gas and diesel excise tax rates.

The Speaker of the State Assembly said any plan to pause or eliminate a gas tax would put funding to maintain roads at risk. 

"Would have jeopardized our transit projects, a lot of jobs and had a very negative impact on the economy," said Assembly Speaker Anthony Rendon.

The Republican Party of Los Angeles County said in a statement "The Republican Party has been requesting a gas holiday for quite some time. We remain hopeful that legislators will finally take action."

The new framework will give $17 billion in "inflation relief" back to Californians, according to the governor's office. Joint filers who make less than $150,000 and have at least one child will receive the maximum amount of $1,050.

Under this new plan, single filers who make under $75,000 would receive $350; those making between $75,000 and $125,000 would get $250; and Californians making between $125,000 and $250,000 will see a $200 payment. Joint filers who make less than $150,000 will receive $700; while those making between $150,000 and $250,000 will see a $500 payment. Joint filers making up to $500,000 get a payment of $400.

"I think it's a joke," said driver Steve Acosta. "They should just lower the gas."

If the budget, with the inflation relief payment, passes in time for the new fiscal year starting on July 1, payments would begin around October.

"October?" said driver Michael Salta. "Well, summer it's hot. We use our AC. We're burning a lot of gas. Why not right now?"