The advantage of doing flat checks, rather than cutting the gas tax to reduce the price, is that the checks don’t get bigger if you drive more, or smaller if you drive less. In other words, they don’t change the incentives around how much gas people use.
Out of Newsom’s $11 billion proposal, about 80% would pay for sending debit cards to car owners. As California gas prices soar — reaching a per-gallon average of $5.90 on Friday — lawmakers are trying to rush to the rescue with pricey proposals to assist drivers. Gov. Gavin Newsom wants to give car owners $400 per car for up to two vehicles, at a cost of $9 billion.
So is the state engaged in a multi-billion dollar contradiction here? Would a payout for car owners essentially undercut the state’s climate efforts? The advantage of doing flat checks or debit cards, rather than cutting the gas tax to reduce the price, is that the checks don’t get bigger if you drive more, or smaller if you drive less, said Jesse Rothstein, a professor of public policy and economics at UC Berkeley, and faculty director of the California Policy Lab. In other words, they don’t change the incentives around how much gas people use.
Still, some environmental advocates wanted to see lawmakers do much more to speed the shift away from gas-powered cars. Miller would have preferred California address rising gas prices by offering a generous reward to people willing to ditch their gas-guzzlers — a ‘cash for clunkers’ program — as well as a commitment to hasten the date by which California will ban the sale of gas-powered cars.