SACRAMENTO — The battle to repeal a likely 65-cent increase in gas prices appeared to die on Wednesday.
The Senate Environmental Quality Committee killed Senate Bill 2 despite the measure’s bipartisan support, Sen. Minority Leader Brian Jones (R-San Diego) said in a press release Wednesday. Jones, who authored SB 2, said the bill would have repealed the new Low-Carbon Fuel Standard regulations passed by CARB in November.
SB 2 failed on a 3-2-3 vote as Sens. Lena Gonzalez (D-Long Beach) and Steve Padilla (D-Chula Vista) voted against the bill, while Sens. Suzette Martinez Valladares (R-Santa Clarita), Megan Dahle (R-Bieber), and Melissa Hurtado (D-Fresno) voted for the measure, citing the out-of-control cost of living and its burden on California families, Jones said. Sens. Catherine Blakespear (D-Encinitas), Caroline Menjivar (D-Burbank) and Sasha Perez (D-Pasadena) abstained from voting, thus killing the bill.
A request for comment sent to Blakespear regarding her vote was not returned by deadline.
Jones said the bill had bipartisan support among many legislators, but the committee opted to kill the legislation, thus putting more crushing levies on gas and residents.
“Today, gas prices in California are $1.55 higher per gallon than the national average because greedy, lame duck Governor Gavin Newsom and some Democrat lawmakers are price gouging us with high taxes, costly regulations, and arbitrary market interference,” Jones said. “By blocking our measure, radical environmentalist Senate Democrats are now complicit in this scheme to raise gas prices 65 cents per gallon in an effort to force Californians into expensive EVs.”
Assembly Republicans have been battling Democrats over the new regulations set by the California Air Resources Board on Nov. 8, 2024, in controversial decision. Estimates showed CARB’s new policies for its low-carbon fuel standard would add a minimum of 47 cents to every gallon of gas with the University of Pennsylvania’s Kleinman Center for Energy Policy predicting as high as 85 cents through 2030 and $1.50 by 2035.
CARB walked back its 47-cent projection amid a firestorm of controversy in November. Recently, projections show gas prices will increase by 65 cents per gallon.
However, the state Office of Administrative Law, the agency overseeing CARB, rejected CARB’s proposal as it lacked “clarity” in rulemaking “so that the meaning of regulations will be easily understood by those persons directly affected by them” CalMatters reported last month.
CARB will review the order and resubmit the rules within the required 120 days. The LCFS offers financial incentives to companies producing cleaner transportation fuels to push the state away from fossil fuels and reduce emissions and air pollution.
Republicans have slammed CARB’s new policy as overreaching and devastating for residents, saying the new policy will drive up the cost of living. Democrats have rebuffed attempts to overturn CARB’s decision noting the policy is critical for the state to meet its ambitious climate goals.
On Tuesday, Phillips 66 announced it will shut down its Los Angeles refinery by October, which will reduce the total number of refineries in the state to eight. The L.A. refinery accounts for 8.5% of the state’s total capacity to refine oil.
Experts warn the closure of the refinery, along with another closing, will result in even higher prices as demand is outpacing supply. The governors in Arizona and Nevada sent a letter to Gov. Gavin Newsom last year pleading with the state not to pass the new CARB regulations.
Nevada and Arizona receive at least 50% of their transportation fuel from California refineries. Those state’s governors warned Newsom that CARB’s action will have severe consequences on their residents, businesses as well as increases to the cost of goods and services in those states.
Gas prices in California have steadily increased since Jan. 1, although prices have dropped over the past week. According to AAA, the average cost for a gallon of regular unleaded gas is $4.66 in California as of Friday, while the national average is $3.12. The state average was $4.84 last month. Diesel fuel remains over $5 per gallon.
In the San Diego metro area, the average is $4.67 compared to $4.78 last month, while diesel was just under $5 per gallon, AAA reported.
Medi-Cal in financial dire straits
The state’s Medi-Cal program is in freefall as healthcare officials and elected officials are plugging serious financial holes for the program.
On Monday, healthcare officials told the state they needed $2.8 billion to pay Medi-Cal providers through the end of 2025. The $2.8 billion is on top of a $3.4 billion loan from Gov. Gavin Newsom told legislators last week for “critical” payments for a total of $6.2 billion.
The program covers nearly 15 million Californians.
Assemblyman Carl DeMaio (R-San Diego), who represents parts of North County, ripped Newsom’s administration and the legislature for costs totaling $9.5 billion for free healthcare for illegal and undocumented immigrants who qualify.
State lawmakers recently expanded Medi-Cal to cover all low-income residents regardless of immigration status. The cost was estimated to be $6 billion, but recent estimates show the cost is at $9.5 billion through July.
“It’s partial,” Newsom told KCRA of the costs from expanding the program to illegal immigrants. “You‘ve seen in Pennsylvania, Colorado, Indiana that don’t have expansion, they had even more sizeable supplements into their Medicaid system. This was something we previewed in the January budget, that I previewed in separation conversations with other governors. The good news is when you’ve seen the revenues in the state we’re collecting are above projections and the economy continues to be remarkably resilient.”
Michelle Bass, director of the California Department of Health Care Services, said in a legislative hearing there are several reasons for high-than-expected spending. Those include increases in pharmacy costs, higher enrollment and the state underestimating the number of illegal and undocumented immigrants who registered for the program.
Additionally, Bass told legislators the department had about one month of data regarding new policies to make financial projections for the budget Newsom signed.
According to media reports, the state would be spending $2.7 billion over what is budgeted due to immigrants, and it costs $8.5 billion from the General Fund to cover all illegal and undocumented immigrants.
The state also saw more seniors registers and stopped counting certain assets such as vehicles and homes to determine eligibility.
“How many more multi-billion emergency bailout loans will it take before Governor Gavin Newsom and the state legislature finally put the interests of California citizens first and immediately cancel the free healthcare handouts to illegal immigrants?” DeMaio asked. “Make no mistake about it: Medi-Cal program is officially insolvent due to the reckless financial mismanagement of Gavin Newsom and California Democrat politicians who gave away free taxpayer-funded healthcare to illegal immigrants.”
Another issue is the potential of $880 billion in Medicaid cuts by congress. House Republicans have advanced a proposal to do so, which could result in cuts between $10 billion to $20 billion per year over the next 10 years, per reports.
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