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Tipsheet

California Has Become a Billboard Advertisement for Trump

AP Photo/Rich Pedroncelli

Californians pay more at the gas pump than residents of any other state in the United States despite Gov. Gavin Newsom’s (D-CA) so-called “plan” to crack down on windfall oil profits

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“Is Gavin Newsom trying to help Donald Trump?” Is Wall Street Journal’s Allysia Finley question, citing his plan to raise fuel prices in Nevada and Arizona just before the November presidential election.

Nevada and Arizona’s gas prices heavily reflect those in California due to them being significantly reliant (90 and 50 percent) on California for their fuel supply. 

According to recent reports, the California Energy Commission is looking to implement a new tax on refinery gross margins which would result in higher costs at the pump and affect prices in bordering states. 

The governor’s initiatives would likely not sit well with former California residents who fled that state for more conservative policies and lower taxes. 

The average gallon of gas in California costs $5.21 a gallon, while in Arizona it is $3.90. In Nevada, a gallon of fuel costs $4.38. These states’ prices tend to rise simultaneously with California. 

Mr. Newsom is escalating his war on the industry. The California Energy Commission is planning to impose a tax on refineries’ “gross margins”—i.e., the difference between wholesale gasoline and crude prices plus certain regulatory costs. The gross margin notably doesn’t include refiners’ operating costs, which include employee pay. California has become a billboard advertisement for Mr. Trump, from its rampant vagrancy to unemployment, taxes, energy costs, and housing prices that are the highest in the nation. To top it off, the state also has a ballooning budget deficit.

Hundreds of thousands of affluent and working-class Californians have moved to Arizona and Nevada in recent years to escape left-wing policies and their consequences. Now Mr. Newsom is exporting the costs to them and folks in other states. Welcome to Hotel California: You can check out but never truly leaveVia the Wall Street Journal.

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Last year, Newsom introduced legislation that would allow California’s energy commission to impose a “penalty” on refiner gross margins exceeding a to-be-determined cap. As a result, refiners in the state lost between 10 and 38 cents on gallons they produced from October 2023 to February 2024. Meanwhile, the gross margins were between 56 to 79 cents a gallon.

At the same time, Newsom faces a $45 billion budget deficit, which went from a $100 billion surplus to a $28 billion deficit in just two years. 

The governor recently announced that the state’s budget deficit is $7 billion worse than he initially proposed, totaling nearly $74 billion.

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