For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “We Must Treat One Another With Respect”
- Governor, Legislature Fortify Capitol After Threats
- “Dealt A Tough Hand”: Newsom Confronts Pandemic Escalation, Economic Recovery, Disasters…A Recall Gathering Momentum
- Governor Rolls Out Record State Spending Plan for 2021-22
- Legislators Begin Scrutiny of Newsom’s Budget: “Is That the Right Number?”
- Democrats Seek to Boost Large Corporate Tax Rate for Homeless Programs
Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests. Please feel free to forward.
READ ALL ABOUT IT!!
FOR THE WEEK ENDING JAN. 15, 2021
NOTE TO OUR READERS – CN&N next week provides detail on the FY21-22 State Budget. Gov. Newsom previews his proposal later today, and the Legislature offers its opening response on Monday.
Governor, Legislature Fortify Capitol After Threats
Politico
Gov. Gavin Newsom announced fortified security measures Thursday for the California State Capitol and other government buildings as law enforcement braces for potential unrest ahead of President-elect Joe Biden’s inaugural next Wednesday.
And underscoring the peril, speakers at a Thursday budget hearing made thinly veiled threats of violence against state lawmakers.
The governor said efforts will include deploying 1,000 California National Guard members to protect the Capitol and other state assets, erecting a 6-foot-high chainlink fence around the Capitol building and ensuring the State Operations Center can meet requests for assistance at any hour. The state will coordinate operations via its Law Enforcement Coordination Center, which Newsom said he would activate “to its highest level.”
“In light of events in our nation’s capital last week, California is taking important steps to protect public safety at the State Capitol, and across the state,” Newsom said in a statement. “Our State Operations Center is actively working with federal, state and local law enforcement partners in assessing threats and sharing intelligence and information to ensure those disgraceful actions are not repeated here.”
Shortly before Newsom unveiled those countermeasures, people allied with California’s anti-vaccination movement spoke in vitriolic terms at a budget hearing in the State Senate chambers. They threatened legislators — signaling that the risk of violence could hang over California politicians as the state embarks on a months-long mass inoculation drive.
One woman decried vaccinations before noting that Americans had purchased millions of guns in recent weeks and ominously asking, “What do you think they’re going do with them?” Another spoke of a “new world order” and told legislators they are “going to be the first to go.”
“We didn’t buy guns for nothing,” the woman said.
They singled out Newsom and State Sen. Richard Pan (D-Sacramento), the author of bills tightening student vaccination requirements, promising political repercussions. One woman read from a clipboard emblazoned with the logo of a campaign to recall Newsom. “Newsom is first. And once he’s gone Pan is the next,” said another. Vaccine dissenters have repeatedly tried and failed to recall Pan.
Senate President Pro Tem Toni Atkins (D-San Diego) said in a statement that the witness comments “were threats and they are being treated as threats.”
“As leader of the Senate, the safety of my colleagues and staff remain my priority, especially right now,” Atkins said. “Tensions are running high, but as we’ve seen, words have consequences, and we must treat one another with respect.”
Pan said in an interview he was not concerned about the level of security at the Capitol, but he said vaccine opponents had to face legal consequences for what he called their increasingly aggressive tactics, warning that “threats of violence often lead to real violence.”
Pan, a medical doctor who has championed tougher vaccines laws, has in recent years been the target of online death threats and a live-streamed assault in Sacramento near the Capitol. After opponents of a 2019 vaccine mandate bill unsuccessfully sought to thwart the measure by pounding on doors and shouting from the Senate gallery, a woman derailed the end of the legislative session by hurling a cup of apparent menstrual blood onto the Senate floor.
“We saw what happens when you ignore it,” Pan said, citing the riot in Washington. “That’s what happens when there’s no accountability.”
Politico & CalMatters
California is running so low on oxygen that officials are telling emergency crews to conserve supplies. Ambulances in Los Angeles are backed up outside emergency rooms, sometimes for hours. And the coronavirus vaccine distribution remains so disjointed that a freezer failure that forced immediate inoculations of hundreds of people in Northern California — inmates, older people, and some people on the street — was hailed as an improvement.
Californians are frustrated, tired and sick. And in the midst of the unfolding catastrophe, Gov. Gavin Newsom — confronting a burgeoning recall effort, on top of a year of wildfires and civil unrest — is under siege.
“Nobody has been dealt a tougher hand than Gavin Newsom,” Gray Davis, the former California Democratic governor who was recalled in 2003, said in an interview. “Look, I had the energy crisis and a recession. He has a pandemic we haven’t seen for 100 years. He has the fallout from that pandemic, racial injustice, wildfires, and I think I’m leaving something out. But nobody, no living governor, has had to experience as many crises as him.”
Halfway through his first term, the Democratic governor of the nation’s most populous state is scrambling to control a pandemic that has crippled the southern half of California since Thanksgiving. The pandemic has given Republicans, long sidelined in this heavily Democratic state, a rare opportunity to wound him. And Newsom is laboring to keep the state — and his own political future — intact.
“People are really pissed off,” said Ted Costa, the anti-tax crusader who was the original proponent of the Davis recall. He signed Newsom recall papers last week in the parking lot of a Home Depot in Thousand Oaks. “Things can get hot quick, and I don’t know if Newsom realizes what happens when a groundswell hits.”
For Newsom, an ambitious Democrat with a national profile, the extent of the problem is unclear. The last Republican to win a gubernatorial election in California was Arnold Schwarzenegger, and that was nearly 15 years ago. When Newsom won the governorship in 2018, he carried the state by nearly 24 percentage points. His public approval rating last year stood at 60 percent.
Yet the pandemic has worsened in recent weeks. And the frame of reference through which Californians view Newsom is about to change dramatically when Joe Biden replaces Donald Trump in the White House. No longer benefiting from a reliable foil in Washington, the bar of public approval for Newsom — and for Democratic governors across the country — is likely to be raised.
“For the last couple of years during Newsom’s tenure, people have been saying the nation’s going in the wrong direction and the state, compared to the nation, is going in the right direction,” said Mark Baldassare, a veteran pollster and president of the Public Policy Institute of California. Now, without a Republican president to judge Newsom against, he said, “It certainly changes that point of contrast.”
Newsom has met the surging virus and its economic fallout with a series of proposals intended to help the most vulnerable Californians and to get schoolchildren back into classrooms. Last month, he proposed a $2 billion effort to reopen elementary schools for the state’s youngest students, with additional protective equipment and testing. Earlier last week, Newsom proposed giving the state’s low-income workers $600 “rapid cash” grants. And in a boon for his political fortunes, the state’s budget, despite dire predictions, is so healthy that Newsom released a budget proposal on Fridaythat calls for record spending while adding billions of dollars to the state’s reserve accounts.
But good news has been rare in California, and Newsom has not been without blunders. He came in for a drubbing after attending a dinner party for a top political adviser at the upscale restaurant The French Laundry — a liability not only because Newsom enjoyed his night out as he was discouraging Californians from gathering for the holidays, but because the location was so posh. Californians who might otherwise have stopped mocking him for that episode weeks ago have only had more reason for frustration amid the pandemic’s worsening conditions.
“In the city of Los Angeles and in our county, Covid-19 is now everywhere and infecting more people than ever,” the city’s mayor, Eric Garcetti, said at a grim news conference on Thursday night.
Garcetti, a Democrat who has come under public pressure similar to that facing Newsom, has blamed the federal government — not the state — for delays in vaccine distribution. But Newsom is facing criticism from others for being too slow to distribute the Covid-19 vaccine, something the federal government has left up to states.
“I don’t think Californians can understand why we have hundreds of thousands of doses sitting there, and they’re not being administered,’’ said Garry South, a Democratic strategist who advised Newsom’s 2010 gubernatorial campaign and was a senior adviser to Davis. “California’s been through nearly 10 months of hell, and now there’s potentially a light at the end of tunnel with these vaccines — but it doesn’t do anybody any good if they’re not administered.”
“You’ve got to get these vaccinations in people’s arms,” he said.
Like other Democrats, Newsom has faulted the Trump administration for the slow vaccine rollout, joining the Democratic governors of seven other states last week in pressing federal health officials to release more doses. And in the new administration in Washington, Newsom will have some help. California Secretary of State Alex Padilla, who this month will be sworn in to fill the seat of Vice President-elect Kamala Harris, said in an interview that he plans make “Covid, Covid, Covid” his top priority — and will work immediately to get Newsom whatever help he needs.
At the federal level, Padilla said, “We know that vaccines have been approved, but we’re still nowhere near where we need to be in terms of the volume of production.”
For Newsom’s political purposes, the sooner the better. For years, Republicans’ messaging on taxes, regulations and social issues has fallen flat in gubernatorial politics here, a reflection of California’s overwhelmingly Democratic electorate. But the coronavirus has come as a bonanza for Newsom’s critics, providing an opening for anti-Newsom broadsides that might resonate beyond the Republican Party’s base.
“In the midst of this pandemic, with so many people hurting and now out of work, … we have 500,000 Californians that can’t get an unemployment check,” said former San Diego Mayor Kevin Faulconer, who this week launched a gubernatorial exploratory committee. “How many parents are frustrated, when they look to see that the majority of private schools are up and running and operated and yet we haven’t been able to safely reopen our public schools? That’s unacceptable.”
He and other Republicans have been casting Newsom as directionless on pandemic — a narrative that has been assisted by the increase in cases despite restrictions. “Look, all we heard — all year long — from Gavin Newsom was that once we have the vaccine, all problems will be solved, the lockdowns will end and we can get back to normal life here in California,’’ said Jennifer Kerns, a conservative talk show host and former state GOP spokesperson. “And that’s not been the case.”
Joe Rodota, a former Republican strategist who left the party due to Trump’s influence and once served as deputy chief of staff to former Gov. Pete Wilson, said Newsom in October “was basically the vaccinator-in-chief” and “Mr.-On-Top-of-It” — swiftly launching logistics and efficacy teams to get the vaccines to Californians as quickly as safely possible. “He said it was all coming,” Rodota said. Now? “It’s all fallen apart.”
Newsom’s political mentor, former San Francisco Mayor Willie Brown appeared to agree in a Sunday column entitled, “It’s time for California to give the vaccine to anyone who wants it.” In the 1950’s polio outbreak, “you didn’t have to be a genius to find out where the vaccine was being given, or what ‘phase’ of the plan you were in, to get the pink sugar cube that included the vaccine,” Brown said. “Let’s do that again. Keep it simple, precise and convenient.”
Against that backdrop, the push to recall Newsom has been gaining steam. Though recall efforts are mounted routinely against governors and rarely qualify for the ballot, proponents of the anti-Newsom effort said Tuesday that they had surpassed 1 million signatures — about two-thirds of the number they need to force an election later this year — in part by soliciting signatures by mail from Republicans and independent voters. The effort drew a $500,000 donation recently from an Orange County donor who objected to Newsom’s orders limiting religious gatherings due to the coronavirus.
Dave Gilliard, the Republican strategist who helped orchestrate Davis’ recall in 2003 and is advising the Newsom recall effort, put the odds of qualifying for the ballot at about 80 to 85 percent.
“It’s really taken off in the last couple of months,” he said, attributing the increase to what he called “the French Laundry surge.”
Newsom’s advisers are paying attention to the recall effort, doing interviews and casting the recall proponents as “pro-Trump extremists.” Dan Newman, Newsom’s chief political adviser, said “the recall effort is primarily fueled by the same hatred, misinformation and lack of respect for democracy that led domestic terrorists to storm the Capitol.”
Lacing into Faulconer and John Cox, the Republican defeated by Newsom in 2018, Newman said, “Trump’s California acolytes like Kevin Faulconer and John Cox are marching in lockstep with the president, blindly following his example by refusing to accept and respect the will of the voters.”
But Newsom’s advisers are not advertising or holding press conferences, privately disinclined to give air to an initiative they believe is unlikely to qualify without a significant infusion of additional money. Proponents of the recall need to collect roughly 1.5 million signatures by March; ensuring they have enough valid signatures means they will likely need to collect far more than that number.
And if the recall initiative does qualify for the ballot, actually recalling Newsom will be a much taller task. Republicans make up less than a quarter of California’s electorate. And by the time of any recall election, which would not come until months after signatures are submitted, the mood of voters — by then potentially vaccinated — may dramatically improve.
For now, Davis said he expects Newsom to focus heavily on promoting the vaccine, which he said should “give people the sense that this pandemic is eventually going to end.” And overall, given the challenges of the pandemic, Davis said Newsom has “done a remarkable job.”
“There’s a reason why his public approval ratings are still in the mid- to high-50s,” Davis said. “He’s totally transparent. He explains why he’s going to do something. He tells you whether it was accomplished and, if not, why not. And I think there’s an endearing quality about him that voters like.”
Governor Rolls Out Record State Spending Plan for 2021-22
CalMatters
More than last year’s budget. More than the year before. More than any California budget ever.
Despite — or maybe because of — the last 10 months of arrested economic activity and unchecked viral contagion, Gov. Gavin Newsom introduced a record-breaking $227 billion spending plan for the coming fiscal year.
It includes:
- A higher level of education spending per pupil than ever before.
- An extra $4.6 billion to fund expanded summer school programs.
- Nearly $1.5 billion to subsidize electric car sales and expand charging infrastructure.
- $16 billion into the state’s rainy day fund.
- $5 billion in “immediate action” pandemic programs he hopes the Legislature will pass in the coming weeks.
It’s certainly been a journey since last January. “We were talking about a 10-year expansion of our economy here in the state of California,” Newsom marveled at a press conference this morning. Then the coronavirus arrived. Lockdowns began. The number of unemployed Californians surged and tax revenue projections withered.
With his budget proposal today, the governor heralded what he framed as the beginning of the end. “We are on a much better fiscal footing than anyone could have imagined even a few months ago,” he said — so much so that the state appears on track to be forced legally to issue tiny taxpayer rebates next year.
As always, Newsom’s fiscal framework is only the opening offer in a half-year back-and-forth between the governor’s office and the Legislature. The state constitution requires a final budget for the coming fiscal year be passed in June.
But this rough draft from the governor’s office will set the terms of debate for the taxing and spending negotiations to come. As the ongoing public health and economic disasters threaten an increasingly credible political disaster for the governor — manifested in a mounting recall campaign — the proposal also gives Newsom a chance to prioritize and set a new tone for 2021.
The unexpected cushion of cash in this year’s budget is made possible by the dismally low expectations lawmakers worked under last summer. In a profoundly pessimistic mood, the administration and legislative leaders lowballed their projected tax haul.
Blessed is he who expects nothing, for he shall never be disappointed.
In November, the state’s nonpartisan Legislative Analyst Gabriel Petek broke the “jarring” news: “As it turns out, revenues have proven to be much more resilient than that…We see a very large revenue windfall taking shape.”
Driven by a still-roaring stock market and stable earnings among the state’s highest earners and largest taxpayers, the governor’s new tax revenue projection for the current fiscal year is 20% higher than it was projected to be in June. “Folks at the top are doing pretty damn well,” the governor noted today.
That doesn’t mean state lawmakers can go on a spending spree. This year’s extra financial buffer is a one-time pot of cash, but the economic drag of the pandemic could last for years. The governor’s office projects long-term deficits in the $7 billion to $11 billion range extending into the next three years.
That fiscal reality will make it much harder for the governor and Legislature to introduce permanent new programs or expand existing ones.
“Given the influx of tax revenue coming from high-income Californians who are doing well, we have a responsibility to use our resources to help those who have been struggling. These communities have been neglected many times in the past,” Assembly Speaker Anthony Rendon said in a statement. The Los Angeles Democrat also said this was a chance to more quickly help people unable to pay their rents short-term, and to address a housing and homelessness crisis longterm.
And he stated the obvious: that California can expect more federal help from the incoming Biden administration.
Newsom’s fiscal proposal is running on parallel tracks this year: one set at the Capitol’s standard, lumbering procedural pace, the other cranked up to high, we’re-in-the-middle-of-a-pandemic speed.
That fast track is reserved for roughly $5 billion in COVID-related policies that, in the governor’s view, are too urgent to be left to the constitutionally mandated five-month budget-writing timeline. It’s typical for governors to include “early action” items in their budget proposals. But they usually aren’t this big, ambitious or expensive.
“In this environment, we can’t wait as we traditionally have for the fiscal year to end — to adjudicate and dialogue around the give and takes of budget. There are certain things that require urgency,” Newsom said today.
He’s been previewing some of these “insta-budget” proposals all week. They include:
- The “Golden State Stimulus”:The governor wants to send $600 checks to pad the pockets of hard-up Californians. Unlike the federal government’s COVID relief bill, these checks will only go to the state’s lowest earners — those who make less than $30,000. “We want to get roughly 4 million checks out within 3 weeks of me signing this package,” Newsom said.
- Rental assistance:California got an extra $2.6 billion from the most recent federal relief bill to help renters. The governor wants to pass that renter relief alongside an extension to the current moratorium on evictions.
- Cash for open classrooms:The governor stopped short of ordering the state’s public schools back open. He said he rejected presenting a “closed fist versus an open hand” today, but acknowledged that the state might need to take a heavier hand in districts where districts and teachers unions cannot come to an agreement. For now, he’s hoping a $450 per student cash bonus will entice districts to get their students off Zoom and back to brick-and-mortar school, once health authorities deem it safe to do so.
- Small business boosters:The package includes more than a billion dollars in tax credits and cash grants to struggling businesses and non-profits.
It’s not clear when these measures will be introduced — and once introduced, when and if they will pass. But Newsom said he hopes to see some of these policies introduced “in the next few weeks.”
Last summer, lawmakers got the budget to balance by drawing down the state’s saving accounts, rescinding a few tax breaks for businesses, cutting state worker pay and kicking the can on necessary payments — especially to schools.
The question going into this year’s budget cycle: How much of that will get backfilled?
The governor’s spending plan includes $9.2 billion to pay back deferred payments to public school districts. That adds up to about two-thirds of those IOUs.
The budget also seeks to restore some of the funding for higher education that last year’s budget gutted. And it introduces emergency grants for students struggling financially and proposes 9,000 new slots for the state’s chief financial aid program, the Cal Grant.
But at a time when early childhood advocates have been begging the state for support to keep child care facilities impacted by the pandemic open, the budget proposal shows no significant increase in investment in child care. Transitional kindergarten is getting a small boost with $250 million for expansion of the program for 4-year-olds and additional one-time funds that also can be used for facilities.
Newsom’s proposal “for the most part fails to heed this week’s call from more than 1,000 diverse groups around the state to prioritize kids in the state budget,” the advocacy group Children Now said in a statement. “California leaders must urgently address the fact that kids – especially kids of color, kids in poverty and youth in foster care – have been disproportionally impacted by the pandemic, and the learning loss and increase in mental health issues threatens their – and our collective – future.”
Progressive lawmakers have been clamoring for years, though with increasing urgency since the beginning of the pandemic, to expand Medi-Cal, the state’s subsidized health insurance program, to cover undocumented seniors.
Newsom got on board with the idea last year but it foundered, along with so many other legislative ambitions, as COVID cases began to mount. Asked why the proposal was missing from his budget this year, Newsom emphasized how much more challenging the budget landscape is today compared to a year ago. “We have to be mindful of overcommitting $3 plus billion a year,” Newsom said, referring to the cost of expanding healthcare to undocumented seniors. “I believe in universal coverage…Right now the resources are scarce.”
Anthony Wright, executive director of Health Access California, said he disappointed by the governor’s decision.
“This is the most vulnerable population that is currently excluded from coverage,” he said. “They are particularly imperiled because of the pandemic.” He also said he was concerned that there was not more relief offered to people who are struggling to afford coverage under Covered California, the state’s individual health insurance market, after losing employer-based benefits.
This year’s budget proposal also includes a few tidbits likely to revive the perennial debate over housing production that pits the state against reluctant local governments.
It’s an urgent issue for the governor. During his 2018 election, Newsom vowed to oversee the production of 3.5 million units. But among the failed proposals to boost the production of housing was his ill-fated attempt to punish local governments that don’t permit enough housing by yanking their transportation funding. The governor’s office has also taken the Orange County beach town Huntington Beach to court for failing to build enough.
This year the governor is proposing to create a “housing accountability unit” which, according to a summary packet published today, will engage in “monitoring, technical assistance and enforcement of existing housing production laws.”
“This is to monitor city council meetings. This is to monitor board of supervisor meetings,” the governor said. “We’re not going to wait for an article to be written to be proactive in terms of holding local governments accountable.”
Newsom’s January budget proposal puts $1.5 billion towards his promise to phase out the sale of new gas-powered cars in California by 2035. About $465 million would go towards boosting incentives to purchase cleaner cars, trucks, buses, and freight equipment — including California’s Clean Cars 4 All program. Under the proposal, the state would also borrow $1 billion against future revenues to fund construction of electric vehicle charging and hydrogen fueling stations. “
“The Governor is rightfully prioritizing clean mobility and clean air for the Californians most vulnerable to pollution, poverty and pandemic,” Coalition for Clean Air policy director Bill Magavern wrote in a statement.
And picking up on a particularly old debate, the governor noted today that the state is on track to bust through a spending limit that voters added to the state constitution in 1979. Thanks to the Gann Limit, the state can’t exceed its 1978 spending level, per Californian and adjusted for inflation. Any revenue over that cap has to be split up and sent to school districts and taxpayers.
The Newsom administration’s Finance Department estimates that the limit will be exceeded for the second time in California history. But don’t count on that rebate check just yet. “We’re really not going to know exactly what the dollar figure is until (May),” said the governor.
But if current assumptions hold, the state will be forced to send taxpayers $51 million. Split evenly among the 30 million or so Californians of taxpaying age, that works out to roughly $1.70 — maybe enough to buy your next N95, if you buy in bulk.
Legislators Begin Scrutiny of Newsom’s Budget: “Is That the Right Number?”
Sacramento Bee
Gov. Gavin Newsom’s coronavirus recovery proposal is too focused on promoting electric cars and not enough on supporting small businesses, some lawmakers said Monday.
Some moderate Democrats were among the lawmakers who raised concerns about the plan during the Legislature’s first hearing on Newsom’s budget proposal, indicating it faces hurdles from his own party.
Assemblyman Jim Wood, D-Healdsburg, pointed out that Newsom wants to spend more on his electric car plans than on grants for struggling small businesses.
“We have $1.5 billion in the budget for electric car infrastructure and incentives. We have $575 million going to small businesses. I wonder: Is that the right number?” Wood said, as his Republican colleague James Gallagher, R-Yuba City, nodded his head vigorously behind him.
Newsom’s economic recovery plan includes $575 million in grants for small businesses to help them through the pandemic. Last year, he and lawmakers approved $500 million for the same program, which provides up to $25,000 to struggling businesses.
He’s also asking lawmakers to quickly approve $70 million in fee waivers for businesses hit hardest by the pandemic, including salons and restaurants.
The plan includes $1.5 billion to help low-income Californians buy zero-emission vehicles and to build infrastructure to support them, including electric charging stations and hydrogen fueling stations.
That spending would help Newsom reach an ambitious goal he set through a September executive order that aims to phase out sales of new gas-powered cars by 2035 to reduce carbon emissions that are warming the planet.
Newsom argues the funding will help create jobs for people to manufacture zero-emission cars and build charging stations for them.
But Assemblyman Jim Cooper, D-Elk Grove, called the proposed electric vehicle spending “disconcerting.”
“Climate change is real… but if you ask the average person, what are their issues right now… no one’s thinking about electric vehicles,” Cooper said. “That’s a part (of the governor’s budget plan) that really concerns me and in some ways it is tone deaf to the citizens of California.”
Several Republicans also blasted the plan, including Gallagher, who said he supports the governor’s direct aid to small businesses through grants and fee waivers, but thinks the money Newsom has slated for electric cars should be spent elsewhere.
To pass, Newsom’s plan needs only a majority of support in the Legislature, meaning he won’t need all Democrats to support it. Several Democrats also spoke in support of his climate and transportation plans, including Assemblywoman Eloise Gómez Reyes.
“The proposed investments in clean air, clean transportation infrastructure and meeting our climate goals not only reflects the priority of a majority of Californians, but it also provides another avenue for economic recovery,” the Grand Terrace Democrat said.
Assemblyman Richard Bloom, D-Santa Monica, said the Legislature needs to continue fighting climate change, even during the pandemic.
https://www.sacbee.com/news/politics-government/capitol-alert/article248451550.html?ac_cid=DM362730&ac_bid=-886296618#storylink=cpy
Democrats Seek to Boost Large Corporate Tax Rate for Homeless
Sacramento Bee
California Democrats unveiled legislation to increase tax rates on larger corporations in order to establish a permanent funding stream for solutions to the state’s homelessness crisis.
Assembly Bill 71 would increase tax rates on multinational corporations worth more than $5 million, from 8.84% to at least 9.6%, a rate from 1986. The proposal, Democrats said during a press conference, would raise up to $2.4 billion annually for homeless programs.
The money would help support nonprofit organizations and create more affordable housing, according to the coalition sponsoring the bill, which includes city leaders and advocacy groups.
The legislation would also require a “gaps and needs analysis,” said Assemblyman David Chiu, D-San Francisco, to ensure every dollar is “is spent, and spent wisely.”
“This measure is not just about money,” Chiu, a co-author of the bill, said. “It’s about strategy. It’s about a roadmap. It’s about how to address homelessness in a meaningful way.”
Gov. Gavin Newsom proposed in his January budget funneling $1.75 billion in one-time funding toward buying hotel and motel rooms for the homeless, with a specific emphasis on mental health housing and sheltering older Californians.
“Let’s use this money to make that investment,” Newsom said.
But state budget in recent years have continued upping funding to help cities and counties shelter and care for 151,000 homeless Californians, it’s usually a one-time allotment that leaves advocates wondering if more money will come the following year.
“While I appreciate the governor’s dedication of funding to homelessness,” Assemblyman Luz Rivas, D-Arleta, who is spearheading the measure, “it is not proposing ongoing funding. It’s just one-time allocation. That’s what this bill is attempting to accomplish.”
Democrats last year floated other proposals to raise taxes on California’s millionaires. Those plans failed to garner enough support for consideration before lawmakers concluded their 2020 legislative calendar.
Moderate Democrats have generally shied away from tax increase proposals, including on businesses. Voters also rejected a ballot measure this year that would have increased property taxes on some businesses to raise money for schools and communities.
Newsom has also rejected calls to increase taxes.
“They’re not part of the conversation,” he said Friday.
Yet Los Angeles Mayor Eric Garcetti rejected any idea that AB 71 would harm businesses, arguing that owners want nothing more than to decrease homeless encampments along their storefronts.
“As a mayor, we don’t want to do something that would chase business out of California,” he said. “This is thoughtfully done to see businesses thrive.”