California Gov. Newsom proposes $400 inflation relief checks for eligible registered vehicle owners

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California Gov. Gavin Newsom announced Thursday an $18.1 billion package aimed at relieving inflation for struggling Californians.

The proposed relief program would include $400 checks to all eligible registered vehicle owners in the state. The proposal comes as drivers face record gas prices.

"We enacted the most comprehensive economic stimulus program in the nation last year, getting billions in immediate relief to millions of Californians. But many folks are still struggling, especially with high costs due to inflation, so we’re leveraging this historic surplus to get money back into the pockets of Californians," said Newsom.

INFLATION TRIGGERS CALIFORNIA MINIMUM WAGE INCREASE IN 2023

California Gov. Gavin Newsom leaves a news conference after unveiling his proposed $286 billion 2022-2023 state budget during a news conference in Sacramento, Calif., Monday, Jan. 10, 2022. (AP Photo/Rich Pedroncelli / AP Newsroom)

He added, "This inflation relief package will help offset the higher costs that Californians are facing right now and provide support to those still recovering from the pandemic."

Other areas of financial relief include public transportation and child care for low income families. Newsom's plan would offer these services for an even further subsidized rate, if not free of charge for a limited time.

A further $1,500 in relief checks is proposed for hospital and nursing home staff "who have been delivering care to the most acute patients during the COVID-19 pandemic and saved thousands of lives."

FILE – Gas prices are displayed at a gas station Friday, March 11, 2022, in Long Beach, Calif.  (AP Photo/Ashley Landis / AP Newsroom)

Over $1 billion would also be set aside to help residents pay their past-due utility bills, including electricity and water.

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A new minimum wage will take effect in California next year, an increase triggered by soaring inflation.

University of California, Berkeley economics professor Jim Wilcox, however, warned that the inflation proposal may actually exacerbate the problem.

"Providing these extra subsidies, these extra checks will only increase the amount of demand so if anything will tend to make the inflation rate a little higher," Wilcox told KTVU Fox 2. 

Separately, Newsom's administration announced Thursday that the state's minimum wage will jump to $15.50 per hour.

The California Department of Finance said they project inflation for the 2022 fiscal year will be 7.6% higher than the year before, triggering the increase.

Inflation cooled on an annual basis for the first time in months in April, but rose more than expected as supply chain constraints, the Russian war in Ukraine and strong consumer demand continued to keep consumer prices running near a 40-year-high. 

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