Sacramento Report: How Senate Leaders Want to Solve the Unpaid Rent Problem - Voice of San Diego

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Sacramento Report: How Senate Leaders Want to Solve the Unpaid Rent Problem

The May budget proposal looks just a tiny bit different from January’s budget plan, revisions to AB 5 move forward while attempts to kill it die and more in our weekly roundup of news from Sacramento.

Activists congregated outside of San Francisco’s City Hall on May Day rallying for the #CancelRent movement amid a crippled economy that has displaced many. / Photo by David Odisho, via Shutterstock

Democratic legislative leaders this week unveiled a plan they think can settle what to do about unpaid rent during the pandemic once there’s no longer an eviction moratorium in place.

As is, renters have received a short-term reprieve from losing their homes if they couldn’t make rent due to the pandemic. But that created a pending problem: They’re still expected to quickly repay missed payments when the eviction moratorium ends – something that many people still won’t be able to afford.

A proposal from Senate leaders released Tuesday would give renters 10 years to make good on the payments while still making landlords whole.

The program would require a renter, landlord and state to all enter into a joint agreement.

The renter would be protected from eviction and receive immediate relief on the rent they owe. They would be required to pay back the rent to the state – not the landlord – over 10 years, without interest, beginning in 2024.

The landlord, by agreeing to forgive the payments and not evict, would immediately receive tax credits from the state equal to the value of the unpaid rent, spread from 2024 through 2033. Those tax credits would be transferable, meaning landlords could sell them to other parties.

That puts the state in the middle of the transaction, attempting to make landlords whole through the tax credits and accounting for that spending by collecting the renter’s payments going forward.

But the program would also base those repayments on each renter’s ability to pay, and could lead to full forgiveness from the state for renters dealing with severe hardship.

It is not yet clear how much the program would cost the state, or how many pairs of renters and landlords could benefit from it. A spokesperson for Senate President Pro Tem Toni Atkins did not respond to a request seeking clarification.

Another outstanding question: What happens to renters who aren’t lucky enough to have a landlord who is willing to opt into the program?

Andrew Keatts

AB 5 Revisions Set for Hearing; Bills to Kill it Are Now Dead

New additions to AB 1850, Assemblywoman Lorena Gonzalez’s bill to further revise and clarify AB 5, have been officially added to the measure. AB 5 limits the instances in which employers can classify workers as independent contractors – and also carves out exemptions for a number of industries.

The changes include clarifications for musicians and freelance writers that Gonzalez’s office has already announced.

It’s been set for a hearing before the Senate Labor Committee on May 20 at 10 a.m. The governor’s budget revisions announced this week include more than $20 million to enforce AB 5.

Meanwhile, two Republican attempts to kill AB 5 died themselves this week. SB 806 by Senate Republican Leader Shannon Grove would have repealed AB 5; SB 990 by Sen. John Moorlach would have suspended the measure until 2022. Both failed in committee votes.

The May Revise Is Pretty Brutal

I think you’d have to go back pretty far to find such a vast, wide canyon between a governor’s January budget proposal and the May revise.

When Gov. Gavin Newsom envisioned the budget in January, he penciled in higher spending on schools and other priorities, and growing the state’s rainy day fund. In the May revise he submitted to the Legislature this week, he’s planning $19 billion less in spending, including cuts to education, and will pull from the state’s cash reserves.

More notes on the budget:

  • One of the spending plans Newsom walked back was an initiative to expand Medi-Cal to cover undocumented immigrants. Assemblywoman Lorena Gonzalez, who chairs the Latino Legislative Caucus, said in a statement, “We are disappointed but not surprised by the governor’s actions to go backward on health for all. … Our undocumented workers and mixed-status families are being dramatically left behind during these times.”
  • Gonzalez cheered another decision of Newsom’s, however: “Relieved and happy to see our Diaper and Feminine Hygiene Tax exemptions are still in the budget. This is the type of equitable tax relief we need more than ever in California,” she wrote on Twitter.
  • The budget also proposes distributing federal CARES Act funding to cities that didn’t receive any funding directly. San Diego received nearly $250 million in federal funding, but other cities in San Diego did not, and have been lobbying the county to free up some of the funds that it received for direct relief to cities.
  • The May revise also proposes an idea mirroring one San Diego Mayor Kevin Faulconer has pushed locally: It “proposes $750 million in federal funding and directs the use of these funds to purchase hotels … to be owned and operated by local governments or non-profit providers.”
  • After the education cuts were unveiled, San Diego Unified told KPBS it’s counting on federal funding in order to make its reopening plan happen.

Odds and Ends

  • One of the bills that’s been cut as a result of COVID-19 was SB 874, a measure co-written by Sen. Ben Hueso to expand indefinitely a program that allows certain community college programs to award bachelor’s degrees. In a note to supporters, San Diego Community College Chancellor Constance Carroll wrote, “Chancellor Judy Miner and I are already searching for a new legislative champion for our bill, which we plan to have introduced in next year’s legislative session.” Carroll plans to retire in 2021, and a spokesman noted she plans to make expanding the program a major priority before she departs.
  • Speaking of community colleges, San Diego Community College District is one of the plaintiffs in a lawsuit filed against Betsy Devos and the Department of Education over restrictions placed on federal emergency student assistance.
  • Some bills are still moving forward, including a bill by Assemblywoman Shirley Weber to create a task force to study and create proposals regarding reparations, and a bill by Assemblywoman Tasha Boerner Horvath to expand the Hubbard Marine Fish Hatchery research program in Carlsbad to include any marine fishing species for sport and commercial fishing.
  • Weber signed on to a letter this week from several legislators to Newsom, requesting that he issue an executive order to protect tenants’ credit scores in the event they can’t pay rent as a result of COVID-19 economic hardships.
  • Senate President Pro Tem Toni Atkins and Assembly Republican Leader Marie Waldron both signed on to a letter sent to congressional leaders requesting $1 trillion in funding for an alliance of Western states, including California, Oregon, Washington, Colorado and Nevada.
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