Gov. Gavin Newsom hadn’t even finished dispensing with all of the bills on his desk ahead of Friday’s midnight deadline before he issued a call for new legislation.
“We’re not going to stand by while greedy oil companies fleece Californians,” the governor said in a stern Twitter video, citing a lopsided surge in gas prices that has resulted in Californians paying about $2.50 more per gallon at the pump than the national average.
Newsom asked state lawmakers to introduce a windfall tax that would cap oil companies’ profits, tax at a higher rate any earnings above that ceiling and return the money to taxpayers via rebates — potentially similar to those the state is set to begin depositing in millions of residents’ accounts this week.
“Oil companies are ripping you off.” Newsom said in the video. “ Their record profits are coming at your expense at the pump. I’m calling for a NEW windfall tax exclusively on oil companies. If they won't lower their prices we will do it for them.”
Democratic State Senate President Pro Tem Toni Atkins of San Diego and Assembly Speaker Anthony Rendon of Lakewood said in a statement: “We’ll look at every option to end the oil industry profiteering off the backs of hard working Californians.”
Democratic Assemblymember Alex Lee of San Jose proposed enacting a windfall profits tax on oil companies earlier this year, but it failed to advance.
Assembly Republican Leader James Gallagher of Yuba City said in a statement: “The governor just doesn’t get it. … The problem in California is policy. We need major action on these prices, starting with suspending the gas tax and additional fees that make our gas so much more expensive here.”
Newsom on Friday also directed the state’s air regulators to allow refineries to begin producing winter-blend gasoline immediately, rather than waiting until after Oct. 31 as required by law. Winter-blend gasoline is easier and cheaper to make than summer-blend gasoline — which refineries are required to produce in hotter months — but it also emits more pollutants, the latest example of Newsom contradicting his own climate goals in order to address kitchen-table issues.
Meanwhile, the California Energy Commission sent a letter to five refinery executives, demanding they respond by today to a series of questions, including: “Why have gasoline prices risen so dramatically in the past 10 days despite a sharp downturn in global crude prices, no significant unplanned refinery outages in the state, and no increases in state taxes or fees?”
The oil industry is taking actions of its own: On Thursday, Secretary of State Shirley Weber cleared for signature-gathering a proposed referendum to overturn a law Newsom signed last month to prohibit new or extensively retrofitted oil or gas wells within 3,200 feet of homes, schools, nursing homes and hospitals.
It’s the latest example of industry turning to the ballot box to challenge laws coming out of Sacramento: A proposed referendum has already been filed against a law Newsom recently signed to create a state-run council to regulate working conditions for the fast food industry while setting workers’ minimum wage as much as $22 per hour next year. The coalition behind the referendum has already raised nearly $13 million, with Starbucks, In-N-Out Burger and Chipotle each contributing $2 million, the Wall Street Journal reported Saturday.