California’s nonpartisan Legislative Analyst’s Office recommended Tuesday that state lawmakers reject a proposed tax credit for sustainable aviation fuel included in Gov. Gavin Newsom’s January budget.
What happened: The LAO wrote in a new report that the credit, which would let fuel producers reduce their diesel tax liability in exchange for refining more sustainable aviation fuel, could negatively impact state transportation funding while offering minimal benefits for greenhouse gas emissions.
Why it matters: The report is the second harsh critique of the governor’s proposal this week, after University of California, Berkeley researchers released a study Monday that estimated the tax credit could inadvertently increase gas prices by 11 to 14 cents per gallon and diesel prices by 12 cents per gallon.
Those warnings signal that the tax credit is likely to receive a skeptical reception from lawmakers as legislative budget committees meet in the coming weeks.
