Stay up to Date
Read about the latest decisions at the state Capitol and how they impact your life (Fridays)
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.
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
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.
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: