Gas rebates for California drivers? Bill would pull $3B from high-speed rail to do it

A Southern California legislator wants to give car owners $100 rebates as a measure of relief from high gasoline prices — and he wants to siphon $3 billion from the state’s high-speed rail project to pay for them.

Assemblymember Tom Lackey , R-Palmdale, introduced the bill last week in Sacramento in a special session of the California Legislature. It’s a long shot, but if Assembly Bill 5 ultimately becomes law, it would direct that $3 billion in greenhouse gas-reduction funds now going to the California High-Speed Rail Authority to be diverted into a fund for gasoline rebates.

The owner of every registered gasoline-powered or gasoline-hybrid passenger vehicle would receive a $100 rebate.

Eight of Lackey’s fellow Republicans in the state Assembly — about half of the party’s caucus of 17 members — have signed on as co-authors of the bill.

“Californians are struggling to gas up and go to work,” Lackey said in a statement issued Wednesday. “State revenues are better spent on Californians than on a high-speed rail project that has been riddled with delays and mismanagement.”

Residents “are paying for this failed (high-speed rail) project through higher prices at the pump,” Lackey added. “It’s time to put some of this money back in their pockets.”

The California Department of Motor Vehicles reports that there are about 26.1 million gasoline or gasoline-hybrid light-duty vehicles registered in the state as of January 2024.

Gavin Newsom support unlikely

AB-5 likely faces long odds against passage. It would require “yes” votes from a majority of the 80-member state Assembly — in which Democrats outnumber Republicans by a 62-17 margin with one seat currently vacant — as well as a majority of the state Senate.

The Senate is dominated by Democrats by a 31-9 margin.

It is also unlikely that Gov. Gavin Newsom, a Democrat, would sign the bill if it were to pass.

“This sounds like Big Oil’s wish list,” a Newsom spokesperson told The Fresno Bee on Wednesday. “Nothing in this proposal will stop the enormous spikes in gasoline prices that bring huge profits to the oil industry and misery for consumers.”

“The governor is focused on real solutions that protect Californians from getting gouged at the pump,” added the spokesperson, Deputy Communications Director Daniel Villaseñor.

Cap-and-trade money and high-speed rail

The California High-Speed Rail Authority currently relies heavily on cap-and-trade money from the state’s greenhouse gas-reduction program. That money comes from companies that bid at state auctions to buy credits to offset their air pollution emissions.

The “cap” part of the cap-and-trade program is the set of limitations placed on polluters’ emissions, and companies are required to get permits for each ton of carbon they produce as air emissions. The “trade” part comes from the ability of companies to trade for additional pollution capacity, buying allowances through auctions or from private sellers whose pollution comes in under their cap.

Over the past two years, from July 2022 through June 2024, the auctions have generated more than $9.1 billion for the greenhouse gas fund. The first auction of the 2024-25 fiscal year, held in August, collected more than $942 million for the greenhouse gas fund.

State law provides that 25% of the annual proceeds from cap-and-trade auctions go to the high-speed rail program.

High-speed rail construction in California

Construction along 119 miles of the bullet-train route through the San Joaquin Valley from Madera to northwest of Bakersfield has been ongoing since 2014, with plans to extend the route and lay tracks on 171 miles from downtown Merced to downtown Bakersfield.

The rail authority’s goal is to begin passenger operations of electric trains at up to 220 mph from Bakersfield through Fresno to Merced, where the line would connect with the Altamont Corridor Express, or ACE, commuter rail system to Stockton and the Bay Area.

The California High-Speed Rail Authority’s 2024 Business Plan forecasts the cost for its planned 171-mile stretch from Merced to Bakersfield within a range from $26.2 billion to almost $33 billion.

In a statement to The Fresno Bee on Wednesday, the rail agency said it cannot comment on pending legislation.

“But it’s important to note that high-speed rail will be the cleanest and greenest transportation system in the country,” the statement read. “(It) will improve air quality, reduce car and air trips in the state, and facilitate stations that will seamlessly integrate with a range of transportation modes, from bicycles and scooters to buses and cars, as well as with pedestrian pathways and rail systems.”