In California, State Lawmakers Propose $100 Billion Stimulus Plan

The California state Capitol building in Sacramento.

The California state Capitol building in Sacramento. Shutterstock

 

Connecting state and local government leaders

The proposal calls for offsetting reduced federal unemployment benefits and a program to incentivize early tax payments.

Democratic state lawmakers in California are proposing a $100 billion package to boost the state’s economy amid the coronavirus outbreak, including backfilling potential reductions in federal unemployment benefit payments.

Instead of raising taxes, the proposal seeks to use existing revenue streams. It would also involve the state borrowing money. One component would offer taxpayers a discount to pay their taxes early—a possible boon to California's finances at a time when the virus is stifling a wide range of economic activity.

Many specifics about how different aspects of the plan might work were still sparse on Tuesday.

“Millions of Californians are suffering in this economic downturn, and Republicans in Washington, D.C. don’t seem to care,” Assembly Speaker Anthony Rendon said in a statement on Monday.

“I look forward to further development of today’s proposals and others in the weeks and months ahead,” he added.

Working groups in both the state Assembly and Senate developed the plan. Democrats say they want to press ahead with their proposals before the current legislative session adjourns on Aug. 31.

A three-page outline of the plan says it would aim to “fill gaps in unemployment insurance,” including extending benefits to undocumented workers and covering “shortfalls” that could result if federal lawmakers don’t extend a $600 a week unemployment benefit expiring this month.

Under the plan, California would borrow from the federal government to help pay for its unemployment program. The state has already done some borrowing like this during the course of the pandemic, as unemployment has hit historic highs. Last week, the California Employment Development Department said the state had paid out about $50 billion in unemployment benefits since March.

The $600 federal payment, enacted in March, comes on top of state unemployment insurance. Republicans in the U.S. Senate on Monday put forward a proposal that would lower the extra payment to $200 a week through September, and then shift to an arrangement where people would receive benefits based on a percentage of lost wages.

Democrats in Congress have proposed extending the $600 a week benefit through January of 2021.

The California plan would also authorize the state’s treasurer to issue “future tax vouchers,” which supporters say would generate billions of dollars to fund economic stimulus efforts.

In general, the voucher program would allow taxpayers to prepay their taxes and receive a small discount for doing so.

Mark Desio, a spokesman for Treasurer Fiona Ma’s office, declined to answer questions on Thursday about how the voucher program could work, referring an inquiry to Senate Majority Leader Robert Hertzberg’s office. Hertzberg’s office didn’t respond to a request for comment.

Other parts of the proposal seek to “securitize,” and “accelerate” the state’s spending of, a variety of revenues—including taxes and fees that fund highway projects, California Public Utilities Commission revenues, and money from the state’s cap-and-trade program.

The outline for the plan explains that the public utilities commission revenue would go towards expanding broadband internet service throughout the state.

A spokesperson for Assemblymember Phil Ting, one of the lawmakers who took a lead role in drafting the proposal, said the final details of the plan were still being worked out and that they couldn’t provide much more information than what was in the outline.

Another idea floated by the lawmakers would involve general borrowing, with the state turning to authorized, but unused, bond capacity to fund infrastructure projects. Exactly how much money could be made available this way is unclear. 

The stimulus blueprint that the Democratic state lawmakers put forward calls for a variety of other measures as well, such as tax breaks for small businesses and sparing small businesses from covering the costs of increased unemployment benefit payments.

It also features proposed spending on programs meant to improve the environment and mitigate the effects of climate change. These initiatives would cover areas like wildfire prevention activities, waterworks upgrades and electric vehicle charging infrastructure.

Gov. Gavin Newsom declined to comment on the plan during a press conference on Monday, saying he hadn’t yet reviewed it.

In June, Newsom signed a $202 billion budget bill that addressed a $54.3 billion deficit. Republicans have criticized Democrats, who control both chambers of the legislature, for relying heavily on "gimmicks" and short-term fixes to balance the state’s budget.

California’s Senate Republican Caucus said in a statement that while some of the “broad strokes” of the Democratic stimulus plan may sound appealing, “the devil is always in the details.”

Bill Lucia is a senior reporter for Route Fifty and is based in Olympia, Washington.

NEXT STORY: Senate Republicans’ Relief Bill Scales Back Enhanced Unemployment Benefits

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.