California Tax Relief Plans Spurred by Unique 1970s Law

A $9 billion plan to dole out cash to Californians as relief from surging gas prices has one big thing going for it: It’s expensive.

Of the 25 states flush with revenue, California is the only one with an arcane 1970s spending limit that dictates what lawmakers can do with the extra money. That law is the subtext of every major budget discussion as it prioritizes some uses, like proposals from Assembly Democrats and Gov. Gavin Newsom (D) to give out $400 payments for gas tax relief.

At the same time, it’s a roadblock for other uses, like saving ...