Calif. lawmakers speedily OK new tax on gas

California lawmakers approved paving the way for a new tax on energy producers via a little-followed bureaucratic panel.

California lawmakers passed a bill during a special session on Monday that will allow the state to penalize oil companies for price gouging. 

Gov. Gavin Newsom initially called for the legislature to pass such a bill last December. 


The backstory: Gas prices throughout the Golden State – which are already the highest in the nation thanks in part to the $0.54 gas tax – hit a record high average of $6.44 per gallon last year. 

  • Newsom quickly put the blame on oil companies for price gouging, saying big oil was ripping off Californians, necessitating a special session of the legislature to increase transparency on gas and oil prices and to protect the state from future price spikes. 

The big picture: The proposal will create a new committee within the California Energy Commission that will monitor the petroleum market daily. 

  • The committee will also gather private information and data from refiners and have subpoena power to compel other data or records to be revealed. 
  • Any funds that are collected from the penalty will go into a fund that the Legislature will have control over. 

State of play: After already passing through the Senate, the Assembly passed SB 2 on a 52-19 vote. 

  • Central Valley lawmakers who voted against it were Jasmeet Bains (D–Bakersfield), Juan Alanis (R–Modesto), Heath Flora (R–Ripon), Vince Fong (R–Bakersfield), Devon Mathis (R–Visalia) and Jim Patterson (R – Fresno). 
  • Newsom could sign the bill into law as soon as Tuesday. 

What they’re saying: Newsom spoke to the media after the vote and applauded the Legislature for approving his proposal. 

  • “When you take on big oil, they usually roll you,” Newsom said. “That’s exactly what they’ve been doing to consumers for years and years and years. The Legislature had the courage, conviction and the backbone to stand up to big oil.”
  • Meanwhile, legislative Republicans assailed Newsom and Democrats in the Legislature for likely increasing the price at the pump.
  • “SBX1-2 bill does nothing to lower the price of gas. In fact, it may do the opposite and increase prices by exacerbating existing supply problems. The result of this shortsighted legislation will be energy market disruptions, higher costs and energy shortages,” Fong said in a statement. “With little public input, the Governor jammed his proposal that demonizes domestic energy production in our state – a policy that will only harm hard-working Californians.”
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