California Legislature's $100 Billion Economic Stimulus Plan
Working groups from both houses of the California Legislature last month proposed a $100 billion joint stimulus plan to put the state on a path toward an equitable and resilient economic recovery by raising revenues without raising taxes by authorizing the state Treasurer to generate revenues by issuing vouchers for future taxes. As the 2020 legislative session comes to a close, TPR shares the working group’s announcement and outline of the plan, which proponents assert will protect Californians and spur job creation during and even after the COVID-19 crisis.
Sacramento – Key working groups from both houses of the California State Legislature are prioritizing economic recovery in the final weeks of session and have developed a joint $100 billion stimulus plan, building upon the successful collaboration that led to a balanced state budget addressing the $54 billion deficit.
Led by Senators Bob Hertzberg (D- Van Nuys) and Steven Bradford (D-Gardena), and Assemblymembers Phil Ting (D-San Francisco) and Jacqui Irwin (D-Thousand Oaks), lawmakers aim to protect Californians and spur job creation during and even after the COVID-19 crisis. Legislative leadership in both houses have been supportive of the working groups’ efforts.
Major Components of Joint Economic Stimulus Plan:
New Revenues Without Raising Taxes. Innovative and fiscally sound revenue solutions will allow California to enact programs that will stimulate the economy through support for small business, protections for working families, and investments in our green economy, including, but not limited to, the following efforts:
- Economic Recovery Fund - Authorize Treasurer to issue future tax vouchers to generate billions of revenues for general economic stimulus efforts outlined in the plan.
- Securitization of current revenue streams:
- Accelerate SB 1 transportation funds to create good jobs now and to improve key roads and highways to better support the economy.
- Accelerate existing CPUC revenue streams that will expand broadband services throughout the state to benefit distance learning and other activities.
- Accelerate future Cap and Trade funds to backfill lost revenues due to the downturn and ensure critical programs remain funded.
- Accelerate authorized, but unused, general obligation bonds to generate bond funds to infrastructure projects.
- Borrow from the federal government to bolster state unemployment insurance programs.
Support for Small Business. Protect small businesses from the impacts of the economic downturn through policy changes and funding, including, but not limited to, the following efforts:
- Expand small business tax breaks, such as extending the sales tax loan program.
- Exclude small businesses from increased Unemployment Insurance costs to repay federal unemployment insurance funds.
- Reduce the risk of small business owners, and other Californians, losing their homes due to bankruptcy.
- Combat history of systemic racism and sexism with efforts to support minority and women owned businesses.
- Streamline the Work Sharing program administered by EDD so more employers have temporary alternatives to layoffs when its business operations are reduced.
- Incentivize on-shore manufacturing of PPE, ventilators, swabs and other products critical to our COVID-19 response, including expansion of workforce retraining programs.
Protections for Working Families. Support struggling workers through stronger benefit programs and policy changes, while ensuring families have access to affordable housing and students have a safe way to learn, including, but not limited to, the following efforts:
- Fill gaps in Unemployment Insurance, including extending to undocumented workers, shortfalls resulting from if the federal government does not extend the $600 per week payment, and other holes that remain.
- Expand the EITC to provide more relief to low-income Californians, including those that file taxes with Individual Tax Identification Numbers.
- Improve access to safe childcare programs, including capital assistance for homeowners updating homes for in-home childcare services.
- Help students return safely to in-person education while balancing costs to schools, and provide expanded broadband access, particularly in rural and unserved communities, so students who cannot return to the classroom aren’t left behind during distance learning.
- Increase affordable housing supply by helping homeowners access financing to build ADUs, and loaning public higher education institutions funds to build more student housing.
- Protect renters from eviction and support struggling homeowners and landlords.
- Augment Budget Act appropriations for local governments to combat homelessness, and provide incentives for local governments to build housing on non-traditional sites.
Investments in our Green Economy. Improve the environment, combat climate change, and create green infrastructure and jobs with investments including, but are not limited to, the following efforts:
- Invest in wildfire prevention and vegetation management activities.
- Fight sea level rise, and protect wetlands and communities from climate change impacts.
- Improve clean water delivery and recycling infrastructure.
- Create a dedicated fund to incentivize light and heavy-duty, including passenger clean vehicles, as well as expedite and expand electric vehicle charging infrastructure projects.
- Make buildings more energy efficient with greener HVAC and water systems, as well as clean energy generation and battery energy storage systems.
- Streamline the CEQA through targeted, and limited, use of the AB 900 process – including for housing – to ensure environmental leadership projects actually get built.
“Early on in the pandemic, the Senate created a Working Group on Economic Recovery to offer ideas for California’s economic recovery without raising taxes, while also focusing on the needs of all Californians – including small businesses and working families – millions of whom have been adversely impacted by this crisis. We must do all we can to help heal our economy, while ensuring that our solutions do not create further harm.” – Senate President pro Tempore Toni G. Atkins (D–San Diego)
“Millions of Californians are suffering in this economic downturn, and Republicans in Washington, D.C. don’t seem to care. Assembly and Senate Democrats are advancing innovative proposals to help people and small businesses. I look forward to further development of today’s proposals and others in the weeks and months ahead.” – Assembly Speaker Anthony Rendon (D–Lakewood)
The stimulus plan aims to raise $100 billion through a new tax voucher program and the acceleration of other existing revenue streams. The money would be used to boost the economy and protect jobs, small businesses, and working families.
“While the stay-at-home order was the necessary and responsible thing to do during the pandemic, the legislature and Governor must now work together to forge an inclusive path forward. Our strategy ensures people don’t fall further behind, while also generating opportunities to put people back to work and build a stronger California.” – Assemblymember Phil Ting (D–San Francisco)
“The Senate and Assembly have been working with the best minds for months to develop the most impactful economic recovery package without harming our state budget. I am excited to share our legislative ideas with the Governor and his Task Force so that together we can protect every-day Californians from further economic fallout created by the pandemic.” – Senate Majority Leader Bob Hertzberg (D–Van Nuys)
“This economic downturn now threatens almost everyone, and especially working and middle-class families. The Legislature is stepping up, advancing a sweeping package of policies that together have the strength to push back against the economic downturn and the COVID-19 pandemic. Most importantly, our approach is inclusive — correcting historical mistakes by prioritizing people of color and other marginalized individuals usually ignored or excluded from public stimulus investments. This will ensure everyone has the opportunity to succeed.” – Senator Steven Bradford (D–Gardena)
“While California continues to battle the pandemic, our Joint Plan looks to the future and makes sure the State is taking the critical steps today to ensure we continue to be an economic leader in the future. By leveraging revenue sources to make investments in our California families and infrastructure, we are laying the framework for California to not only weather this economic downturn but be better positioned on the other side to grow our economy.” – Assemblymember Jacqui Irwin (D–Thousand Oaks)
The working groups will also seek input from the Newsom Administration, including the Governor’s Task Force on Business and Jobs Recovery, and from the public. Both houses will work together to approve measures by the August 31, 2020, legislative deadline and identify priorities for the next session. An outline of the plan is available here.
Treasurer Fiona Ma and State Superintendent of Public Instruction Tony Thurmond are engaged with the Legislature, and will provide their expertise as stimulus policies are refined and finalized.
“I applaud the efforts of both houses coming together help regain California’s position as one of the strongest economic engines in the world. This moment requires diplomacy
and dedication, and I want to thank our Legislative leadership, and the Governor, for their support in this important endeavor.” – California State Treasurer Fiona Ma
"I applaud the Legislature for crafting a creative and innovative plan to generate much- needed revenue that can strengthen our economy, create jobs, and help our schools reach every student. This plan could generate billions for schools at a time when we must urgently close the digital divide in California. I look forward to working with legislators to get this proposal across the finish line." – California State Superintendent of Public Instruction Tony Thurmond
The complete list of Assembly and Senate working group members includes: Senators Jim Beall, Anna Caballero, Maria Elena Durazo, Cathleen Galgiani, Holly Mitchell, Anthony Portantino, Nancy Skinner, and Bob Wieckowski; Assemblymembers Tasha Boerner Horvath, David Chiu, Eduardo Garcia, Adam Gray, Tim Grayson, Jacqui Irwin, Sydney Kamlager, Monique Limon, Kevin McCarty, Kevin Mullin, Al Muratsuchi, Cottie Petrie-Norris, Rudy Salas and Buffy Wicks.
This story was republished with permission from The Planning Report.