Governor Newsom Issues Gas Tax Rebate Checks In California As Gas Prices Remain Around $6.40 per Gallon

Toby Hazlewood

In Georgia it's $3 per gallon and gas tax has been suspended since March
Governor Gavin NewsomTwitter of GavinNewsom

On October 6, California's Governor Gavin Newsom began the process of issuing gas tax rebate checks - so-called 'inflation relief' checks - that will help around 23 million Californians to meet the rising cost of living. The governor was keen to tout measures as a backlash against soaring gas prices, caused by greed on the part of oil companies.

According to estimates, around $9.5 billion will be handed out, with as much as $1,050 being received by some Californian families in a bid to help them weather the rising cost of living in general, and soaring gas prices specifically.

Why do gas prices remain high in California?

While such help is welcome, at a time when the average price of a gallon of regular unleaded in California is $6.42 - just a penny off the highest average price in the last 12 months.

Meanwhile, the national average calculated by the American Automobile Association is just $3.89 per gallon, having dropped significantly from a 12-month peak price of $5.02.

Californians may find themselves wondering why the price remains so high in their state when it's dropped radically across the rest of the United States?

Georgia suspended gas tax in March

While the one-off checks may help in the short-term, this isn't a sustainable solution. In southern states, longer-term measures have been put in place to help citizens meet the cost of living. In Georgia for example, Governor Brian Kemp suspended tax on gasoline in March and has extended the suspension month-by-month, most recently until at least November 11.

It's a measure that has saved Georgians at least $800 million since it began.

What's more, the price of gas in Georgia is currently at an average of just $3.21 for a gallon of regular unleaded.

"Inflation relief" by handing out more free money?

There's a further question that's being raised by economists about the decision by Governor Newsom to help citizens weather the catastrophic levels of inflation by handing out more free money.

Many Republicans are questioning whether the issue of inflation is really down to the Russian invasion of Ukraine, or rather down to mismanagement of the economy by the Biden Administration and the relentless printing of more money. This has ultimately weakened the purchasing power of dollars and contributed to the price of goods soaring in real terms.

While Governor Newsom is intent on making oil companies accountable for the price of gas, inflation is a real factor too, and that's not going to be alleviated by simply pushing billions of dollars into citizens' hands. It's a short-term fix maybe, but the problem will remain longer term until California addresses why gas is almost twice as expensive there than in other states like Georgia and Florida.

That fact won't serve Newsom well in his ongoing feud with Governor Ron DeSantis of Florida either!

Do you think that there should be stronger action on gas prices in California? Are you concerned about addressing inflation by handing out more free money? Let me know your thoughts in the comments section below.

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