Inflation is so bad that California is sending relief checks of up to $1,050 to millions of people

June 29, 2022, 5:50 PM UTC
A fuel distributor at a Safeway gas station in Hercules, CA, last week.
David Paul Morris—Bloomberg/Getty Images

This summer, inflation is impacting everything from driving to work, taking a vacation, or just cooking dinner. 

Gas in particular has been a major pain point for consumers, with prices hovering at an average of $5 per gallon across the country. California has some of the highest gas prices,  with some counties reporting an average of $7 per gallon.

To try and return some spending power to its population of nearly 40 million, California will start sending out one-time-only checks of up to $1,050 to qualifying residents.

“That’s more money in your pocket to help you fill your gas tank and put food on the table,” Gov. Gavin Newsom tweeted on Sunday, calling the provision a “middle class tax rebate.”

“California’s budget addresses the state’s most pressing needs, and prioritizes getting dollars back into the pockets of millions of Californians who are grappling with global inflation and rising prices of everything from gas to groceries,” wrote Newsom, Senate president pro tempore Toni Atkins, and Assembly speaker Anthony Rendon in a joint statement announcing the checks, which were part of a state budget agreement.

California’s payments will vary depending on someone’s filing status and annual income. Joint filers with dependents who earn under $150,000 will receive the full $1,050, while single filers making more than $250,000 will not receive a payment. The $17 billion package will directly impact approximately 23 million Californians, according to the statement.

Aside from the one-time relief checks, California is also taking other steps to ease the effects of inflation, including suspending the state sales tax on diesel, and allotting “additional funds” to help residents rent and utility bills, according to a statement.

Other states have taken similar actions for inflation relief. Earlier this month, Maine began sending $850 checks to state residents who filed an income tax return in the state last year and reported an income of less than $100,000. In April, Kansas Gov. Laura Kelly announced the state would issue $250 rebate checks for qualifying residents.

Inflation, which some economists initially thought would be transitory, has endured much longer than expected. In May, inflation reached 8.6%, the highest since 1981, and touched nearly every consumer sector, according to the Bureau of Labor Statistics.  

The Federal Reserve has taken on inflation by increasing its baseline interest rates several times this year, first in March, a second time in May, and a third time earlier in June. Its most recent rate hike of 75 basis points was its largest since 1994

At the federal level, President Joe Biden has also sought to take action on inflation, focusing on gas prices. Last week, he called on Congress to enact a federal gas holiday by pausing the federal gas tax for a period of three months. Previously, he sent a letter to oil executives, criticizing them for increased profits while consumers suffer at the pump, and asking them to increase production.

With a divided House and Senate, it’s unlikely Biden’s call for a gas holiday will ultimately pass.

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