State lawmakers of both parties suggest ways to help residents and businesses

The coronavirus pandemic had lawmakers of both parties in a forgiving mood Tuesday as they put forth ideas to help California residents and businesses.

In the morning, a group of Democratic senators held a news conference in Sacramento to unveil a $25 billion economic recovery fund. The most-talked about portion of this proposal is a complex scheme to benefit both renters and landlords, though not "large corporate" ones, one of the senators said.

That afternoon, a Senate committee unanimously passed a Republican bill that would create a process for waiving some fees and penalties on small businesses if certain conditions are met. SB 1457 mirrored several failed past GOP proposals.

Both proposals acknowledge the reality that the state is now filled with countless individuals and businesses that won't be able to meet their financial obligations through no fault of their own. But each set of ideas introduces new complexity into a virus response that has already spawned numerous lawsuits.

Take the Senate Democrats' budget proposal. It would allow for "three-party" agreements between renters, landlords and the state to resolve unpaid rents "without interest, to the state over a 10-year period, beginning in 2024."

It would also allow some tenants who lack the ability to pay to have their rent forgiven entirely. Individual landlords who agreed to this option could receive tax vouchers they could use against future tax payments or sell to a third party.

"This proposal is not for large corporate landlords," said Sen. Steven Bradford, D-Gardenia.

The second part of the proposal would allow taxpayers -- from individuals to corporations -- to prepay future year taxes in exchange for a slight discount. The program would allow up to $3 billion in such payments per year, covering the tax years between 2024 and 2033.

Sen. Robert Hertzberg, D-Van Nuys, said the approach could help stabilize the economy by taking in taxes from a future when "baseline revenues will be higher." He compared it to selling bonds or dealing in other financial instruments.

"At the end of the day, the markets will determine what the discount rate is. ... Literally it's like commercial paper. You're just paying in advance," Hertzberg said.

Senate President Pro Tem Toni Atkins, D-San Diego, later circulated supporting quotes offered by labor groups and others. But business groups also put out statements saying they were open to the proposals.

"We recognize that the budget timelines are quickly approaching and we look forward to working with Pro-Tempore Atkins," said California Business Roundtable President Rob Lapsley in an emailed statement.

California Apartment Association President Tom Bannon put out a statement saying he was "committed to working with the Senate to refine this voluntary program to ensure tenants can stay in their homes and rental property owners -- especially mom and pop owners -- are able to continue to pay their bills and their employees."

The proposal came two days before Gov. Gavin Newsom is set to reveal a revised 2020-21 state budget sure to be replete with devastating cuts.

At this point, said Sen. Holly Mitchell, D-Los Angeles, legislators still don't know exactly how big of a hole they'll be dealing with. Last week, the Department of Finance published a report saying the downturn related to the virus and Newsom's ordered shutdowns has punched a $54.3 billion hole in the state budgeting process.

The Legislative Analyst Office, in their spring finance letter, "painted a very different picture, from $18- $31 billion," Mitchell said, referring to a report last week that used somewhat different methodology.

Later the Senate Governmental Organization Committee advanced a bill sponsored by the United Chamber Advocacy Network, a coalition of chambers of commerce.

"SB 1457 allows for regulatory relief by requiring state agencies to help small businesses comply with statutes and regulations," said Sen. Andreas Borgeas, R-Fresno, testifying to the committee remotely on a screen. "It would also require state agencies to develop policies for the reduction or waiver of civil penalties. Unexpected recent events have proven small businesses are an indispensable part of our state."

The bill would apply only to businesses with fewer than 100 employees and exempts willful, criminal conduct and dangerous activities. It follows several similar, failed bills proposed by Republicans in the last four years.

If it passes the full Senate, it would require all state agencies to develop policies by 2022. It would provide possible defenses for fined businesses down the road by codifying into state law a responsibility of agencies to provide such assistance and stating a firm's size and sophistication be taken into account.