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In article <st9en5$rrdk$6@news.freedyn.de>
<governor.swill@gmail.com> wrote:

Democrat crooks in action.

California lawmakers on Monday introduced legislation to
penalize oil companies for alleged price gouging, setting up a
showdown with an industry that has long wielded political
influence in the Golden State. At the urging of Gov. Gavin
Newsom, California Senate Budget Chair Nancy Skinner, D-
Berkeley, proposed a new bill that would levy a penalty on oil
companies when their profits exceeded a legally-established
threshold. The money raised by the penalty would then be placed
in a fund that would be directed back to taxpayers in the form
of rebates. But the initial bill language is vague, failing to
define the profit threshold that oil companies would be
penalized for exceeding and lacking an explanation of who would
be eligible for the rebates. Newsom said those specifics will be
sorted out over the course of the special session. The move
comes two months after the Democratic governor first unveiled a
plan to levy a windfall profits tax on oil companies that were
running up record earnings while Californians were getting
squeezed at the pump. He subsequently called for a special
session beginning to hammer out the plan. “These guys have been
gaming the system for decades,” Newsom said Monday about the oil
and gas industry. “... I think we’ve got a lot of remarkable
legislative leaders here that get it and they’re sick and tired
of paying the price in terms of dirty air.”

Getting a first-of-its-kind penalty like this through the
Legislature and to the governor’s desk will not be without its
challenges. Along with the opening of the special session,
Monday also marked the first day of the regular legislative
session. This meant a new class of lawmakers were sworn into
office — some of whom were elevated to a state office with
backing from the oil industry and its associated trade unions.
One oil-funded political action committee spent more than $8
million this year backing candidates it thought might be helpful
in fending off a possible windfall penalty. CALIFORNIA DEALS
WITH HIGH GAS PRICE SPIKES Newsom proposed the tax when
Californians were paying $2.60 per gallon more than the national
average — an unprecedented margin even in a state known for its
high gas prices.

Although California’s high taxes and environmental fees factor
into the disparity, Newsom and proponents of the penalty say
that doesn’t completely explain what was happening at the time.
California gas prices kept climbing as the price of crude oil
dropped. Newsom said that’s because oil companies were taking
advantage of California drivers to rake in unprecedented
profits. California gas prices have dropped significantly since
then, but Newsom argues the price-gouging measure is still
needed to deter future price spikes. Newsom did not say how much
money Californians could expect to receive if an oil company
still decided to hike up the price of gasoline above the state-
designated threshold. And as for how the refunds would be
distributed, he suggested it could be done in a similar fashion
as this year’s inflation relief checks and the 2021 Golden State
Stimulus. In both cases, leaders used the Franchise Tax Board to
send taxpayers money through direct deposit or mailed debit
cards. “I hope we never have to go there,” Newsom said. “Because
I hope the oil companies change their ways.” The bill also calls
for expanding the powers of the California Energy Commission and
the state Department of Tax and Fee Administration to allow them
to investigate and obtain information from oil companies on
their costs, supply levels and operations. Oil companies hoped
to see more specific language on the penalty proposal after
months of discussion, said Kevin Slagle, a spokesman for the
Western States Petroleum Association. He said market forces,
environmental regulations and public policy are responsible for
high gas prices. “Overall, it’s still the wrong approach to
driving lower energy costs in the state,” Slagle said. PRICE-
GOUGING PENALTY VERSUS TAX Over time, the Democratic governor
has changed his rhetoric around the proposal, retiring the term
“windfall tax” and instead referring to it as a “price gouging
penalty.” It’s a shift that could help win over more moderate
Democrats and provide more wiggle room for the votes needed to
pass the measure. Passing a tax in the Legislature would require
two-thirds support while a cap or penalty only needs a simple
majority. When asked about the deviation, Newsom said his
proposal “went down a different path, a much better path.” He
said the legislative vote threshold was “not a part of my
consciousness.” Democratic lawmakers were hopeful about the new
penalty’s chances in the Legislature. But Republicans suggested
the move will do little to change gas prices, and lawmakers are
better off suspending the state’s gas tax and increasing
statewide oil production. Assemblyman Alex Lee, D-San José, who
floated a similar idea last year, was optimistic about getting a
proposal passed but acknowledged there would likely be a
difficult road ahead. ”I think in times of crisis, we have more
momentum,” Lee said. “Now we’re talking about the future and
being proactive, so it might be harder.” Assemblyman Vince Fong,
R-Kern County, said the penalty will do nothing to lower gas
prices and that it will actually “have the opposite effect.” “If
we are going to to really hone in on energy, let’s have the
debate,” Fong said. “But what the governor’s proposal is going
to do, is it’s going to increase the cost of energy production
in California. And that’s going to make us more dependent on
foreign countries, like Saudi Arabia, Iraq, Ecuador — countries
that don’t share our values.” Fong suggested the Legislature
should instead suspend the gas tax and backfill the lost revenue
with general fund dollars, a proposal Republicans repeatedly
pushed during the previous legislative session. “The governor
always says that the budget reflects values and priorities,”
Fong said. “If the governor’s No. 1 priority is to reduce the
price of gasoline on hardworking Californians, prioritize it —
make it No. 1.”

https://www.sacbee.com/news/politics-government/capitol- alert/article269543677.html

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