California lawmakers reach a tentative deal to send families $9.5 billion in inflation relief

SACRAMENTO — California residents making less than $250,000 will get a check from the state government to offset the rising cost of gas prices due to inflation under a tentative agreement reached by lawmakers.

The agreement, if ratified, puts an end to months of back-and-forth between Democratic Gov. Gavin Newsom and legislative leaders about how best to provide help to Californians, who are paying some of the highest gas prices in the nation. Under the plan, residents will receive direct deposits or debit cards from the state. How much money they receive is tied to dependents and the annual income in a household.

Newsom's office did not confirm or comment on the details of the draft plan, nor did the office of Assembly Speaker Anthony Rendon, which was circulated in an internal email among lawmakers and chiefs of staff. Senate President Pro Tem Toni Atkins' office said no tentative agreement is final, and that until all items of negotiations are resolved, any tentative agreement can unravel.

News of a tentative deal comes as Democratic lawmakers are facing significant pressure from constituents, Republicans, and even some in their own party to fulfill promises they made earlier this year to urgently help families who are struggling under high gas prices. California has the highest average gas price in the nation at $6.35, according to AAA. Up to this point, Democrats have bypassed a number of proposals to lessen the burden of gas prices, including a plan to pause the annual increase on the state's gas tax or temporarily suspend the tax altogether — an option President Joe Biden is considering at the national level.

According to an email outlining the tentative plan, Californians making less than $75,000 will get $350, which doubles to $700 for joint filers making a combined $150,000 or less. Taxpayers in that tier would get an additional $350 if they have any dependents. The maximum payout would be $1,050.

Those making $125,000 or $250,000 jointly will receive $250 or $500 combined, with an extra $250 for dependents. The payments would be capped at $750.

The final tier would include $200 for taxpayers making up to $250,000 alone, or $500,000 jointly, with an extra $200 if they have dependents. This group of high earners would not have received payouts under the Legislature's earlier proposals.

The tentative deal does not tie the relief to vehicle ownership, as Newsom had previously proposed.

The money likely won't hit bank accounts until this fall — Rendon said Monday he hopes the money will land "before October"— but lawmakers estimate they will help 97.5 percent of all California tax filers, about 17.4 million. The tentative agreement also includes an increase in grants for those on federal and state assistance.

The plan is part of a larger set of negotiations between legislative leaders and Newsom over how to allocate California's annual budget, which this year includes a record-breaking surplus approaching $100 billion. The Legislature earlier this month passed a basic framework, but the final details of the state's behemoth budget will likely be solidified in the weeks to come.