California Senate Proposes Rent Forgiveness Program For Low-Income Tenants / Economic Recovery Plan Outlined / Whither The Money?
California Senate Proposes Rent Forgiveness Program For Low-Income Tenants
Under a proposal backed by state Senate leaders, the government would cover rent payments for some low-income Californians impacted by the coronavirus.
The Senate wants to forgive rents for low-income tenants, giving landlords tax credits equal to the value of their missed payments, which they can keep or sell for cash. Tenants would then have up to 10 years to pay back their missed rents to the state, with some not having to pay the full amount because of an unspecified “hardship exemption.”
Economic Recovery Plan Outlined
The proposal is part of an ambitious economic recovery plan leaders unveiled, today, which includes a separate $25 billion “economic recovery fund” for small businesses, nonprofits, and local governments.
The money would come from people voluntarily prepaying their taxes for 2024 through 2033. The state would get the money upfront, while the taxpayers would get a discount.
It is estimated to take two years to fill up the fund. The state could start spending the money sooner to help stimulate the economy. But beginning in 2024, state revenues would be up to $3 billion less each year for a decade. Legislative leaders believe the economic crisis will have passed and the state's annual operating budget of more than $200 billion could easily absorb the losses.
Whither The Money?
The proposals come as state lawmakers are scrambling to craft a state budget that will have $54.3 billion less money to spend than lawmakers had planned in January. Governor Gavin Newsom is scheduled to reveal his spending proposal on Thursday.
Senate President Pro Tempore Toni Atkins on Tuesday vowed the body would avoid “major ongoing program cuts or broad middle-class tax increases.” She said those options work in the short-term but cause long-term problems.
California legislators hope to get assistance from the federal government. Lawmakers estimate they will get $33 billion from what they hope will be an upcoming aid package proposed in Congress. Newsom and leaders from four other western states signed a letter to Congress on Monday asking for $1 trillion in aid for state and local governments.
