A Defiant Pep Talk, a Gas Rebate: What Governor Newsom Offered in State of the State

This story was published March 9, 2022 by CalMatters.

Even as the coronavirus pandemic finally appears to be receding, Californians are in a funk.

They are nearly evenly split on whether the state is headed in the right direction, according to a survey released last month by the Public Policy Institute of California, and gave poor marks to Gov. Gavin Newsom on almost every policy issue, from wildfires to crime to homelessness, in another poll published a few weeks later by the UC Berkeley Institute of Governmental Studies.

So on Tuesday evening, Newsom turned his annual State of the State address into a defiant pep talk, assuring wary residents that, in a world unmoored by autocratic leaders and attacks on voting and abortion rights, the "California way" is still a beacon.

"People have always looked to California for inspiration," he said. "Now, in the midst of so much turmoil, with the stacking of stresses and dramatic social and economic change, California is doing what we have done for generations: lighting out the territory ahead of the rest, expanding the horizon of what’s possible."

Newsom touted better job creation and lower coronavirus death rates than other states, an ongoing expansion of pre-kindergarten to all four-year-olds and billions of dollars in additional funding for homelessness services during his administration.

But there’s only so much comfort to be found in troubled times.

In an 18-minute speech — uncharacteristically brief for Newsom — the governor could not entirely ignore the unfolding war in Ukraine, which he noted at the top of his remarks mattered far more to most people than anything he had to say, or looming challenges such as rising public anxiety over crime.

The only new policy announcement came during an acknowledgment of spiraling gas prices, which have recently surpassed an average of $5 per gallon in California.

After previously calling in January to pause the annual increase to the state gas tax scheduled for July, Newsom pledged to work with legislative leadership on a plan for a tax rebate for drivers.

"Now it’s clear we have to go farther," he said, though he rejected calls from the oil industry and some lawmakers to ramp up oil drilling in the state.

The governor provided no further details about who would receive financial relief or how much. At a post-event press conference, Dee Dee Myers, the governor’s top economic adviser, said the plan, which is not yet complete, would likely distribute billions of dollars to California residents who had registered their cars with the state.

"We want to make sure that the money gets into the hands and pockets of the people who are paying these gas prices, and not into the hands of companies who might take advantage of a moment to increase profits," she said.

The speech in the auditorium of the California Natural Resources Agency, where Newsom unveiled his budget proposal in January, was a far cry from last year’s slicky-produced kickoff of his recall defense at Dodger Stadium — or even the usual pomp and circumstance of an annual event that is typically held in the majestic Assembly chamber at the state Capitol.

A bipartisan phalanx of legislators and other state officials filled the auditorium, which had been lightly decorated for the occasion with live plants onstage — native California species, naturally. Attendees were required to show proof of vaccination and test negative for COVID, but with a statewide indoor mask requirement recently dropped, face coverings were sparse.

Republicans, before and after the event, put out a series of videos and statements on the "real state of the state," slamming Newsom and fellow Democrats for policies that they said had made California unsafe and unaffordable.

Seeming to anticipate those criticisms, Newsom nodded a handful of times to the issues that voters have consistently ranked as the most pressing in the state, including homelessness and public safety. He touted his commitment to violence-prevention programs and a recent proposal to establish county mental health courts, among other solutions that he said would not repeat the failures of the past.

But his focus was largely on the grander scheme. He repeatedly presented California as an alternative to the anger and fear dividing not just the country, but the planet.

"California does democracy like nowhere else in the world. No other place offers opportunity to so many from so many different backgrounds," Newsom said. "The California way means rejecting old binaries and finding new solutions to big problems."

His best hope at overcoming those "binaries" in the near future may be his rebate proposal, which follows weeks of loud pleas by Republican legislators to suspend the state gas tax.

Their early reaction was muted, however. GOP leaders said they were willing to work with the governor on the policy while also dismissing it as another half-baked plan from a man with lots of ideas and not enough follow-through.

Senate Republican Leader Scott Wilk of Santa Clarita said it was "humorous" to hear Newsom speak loftily of democracy and inclusiveness during the State of the State.

"He just completely forgoed all the realities of what’s happening in this state," Wilk said. "He is not addressing the needs of everyday Californians."

Democrats, who hold a supermajority in both houses of the Legislature and could act without any Republican votes, were more receptive to Newsom’s proposal on relief for gas prices, applauding loudly when he announced it during his speech.

Senate President Pro Tem Toni Atkins of San Diego and Assembly Speaker Anthony Rendon of Lakewood, who have been cold on the governor’s pitch to suspend the gas tax increase, released a joint statement after the event promising to "put the state’s robust revenue growth to work by returning substantial tax relief to families and small businesses as fast as possible."

In an election year where the sour mood could be a significant liability for Newsom and fellow Democrats across the ballot, the rebate is potentially a major political gift. For all of Newsom’s attempts to cheer up gloomy Californians on Tuesday evening, the biggest serotonin boost was likely experienced by members of his own party.

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