MEETING DATE:
February 9, 2021
SUBJECT:
Title
LEGISLATIVE REPORT
Body
Recommendation
Recommendation
NOTE AND FILE updates to legislation with an official City position.
Body
Board or Commission Action
Not applicable
Relevant Council Strategic Theme
Planning for the Future
Good Governance
Relevant Department Goal
Not applicable
Executive Summary
The City Council adopted the 2021 Legislative Platform to guide the consideration of state and federal bills that affect City operations. In keeping with that direction, this report provides updates on California state legislative activity, specifically the Governor’s budget proposal for Fiscal year 2021-22.
Discussion
As the legislature convenes the new two-year session, it is expected to be in Sacramento for a short time to take up a short list of urgent issues, including rental evictions, COVID related expenditures (vaccines and distribution) and then work remotely from their districts for several weeks. Of particular interest is the ongoing discussion surrounding rental evictions and rental assistance. Both issues are the subject of ongoing negotiations in the Capitol but are expected to move to the Governor quickly once a deal has been reached. Staff will continue to monitor and report any relevant updates on this issue area as it develops.
The deadline to introduce new bills will be February 19, after which staff will be reviewing introduced bills and will be back with an update and recommendation for positions on relevant bills at the March 9 regularly scheduled City Council meeting.
Governor Gavin Newsom unveiled his $221 billion budget on January 8. The Governor’s proposed budget emphasized the need to focus on “Urgent Needs of Californians” including the safe reopening of schools, support for small business, financial stimulus, vaccination efforts, and wildfire preparedness. Of note, is the temporary good position the state finds itself in financially with a $15 billion surplus. The following reviews the Governor’s proposed sending on COVID relief, Housing, Rental Evictions, Low-Income Housing Tax Credits, Project Homekey Funding, and Libraries and Community Services.
COVID Relief
As part of the Budget, the Governor announced a $3 billion package of immediate pandemic relief to low-income Californians and small businesses. The package includes $2.4 billion for $600 one-time payments to Californians who were eligible for the earned income tax credit (EITC) in 2019, an additional $575 million for grants to small businesses and small non-profit cultural institutions disproportionately impacted by the pandemic, and immediate and targeted fee relief for impacted industries including restaurants and personal services.
In addition to the immediate relief, the Governor announced the “Equitable Recovery for California’s Businesses & Jobs Plan” which comes out to $4 billion in spending including:
- $777.5 million for a California Jobs Initiative to provide incentives targeted at accelerating investment and job creation;
- $500 million for infill infrastructure to accelerate housing development,
- $385 million for workforce development;
- $1.5 billion for the infrastructure and incentives to implement the state zero-emission goals related to the state’s zero-emission vehicle goals by 2035 and 2045.
In addition to funding aimed at alleviating the economic trauma caused by the shutdown orders aimed at stymieing the spread of the COVID 19 pandemic, the Governor also announced as part of his budget $4.48 billion directed at combating the virus and the disease it causes itself, including:
- $2 billion for testing
- $473 million for contact tracing
- $372 million for vaccine deployment; and,
- Additional funding for state response.
Housing
In the area of Housing, the Governor announced several budget proposals including additional protection for renters, additional funding for Project Homekey and the Infill Infrastructure Grant program (noted above in the Economic Recovery package) but also a new Housing Accountability Unit within Housing and Community Development to further facilitate affordable housing production through monitoring, technical assistance, and enforcement of existing housing production laws. The proposal also includes the provision of technical assistance to help local governments meet planning and zoning requirements and to provide proactive engagement before enforcement becomes necessary.
Low-Income Housing Tax Credits and Project Homekey Funding
The Governor is proposing an additional $500 million in low-income housing tax credits to support low-income housing development. This is in addition the ongoing effort by the Administration to streamline and reorganize state housing programs to maximize housing production.
An additional $1.75 billion is proposed in new investments for Project Homekey-the purchase of hotels and motels to address the homeless crisis. Funds can be used to purchase motels, develop short-term community mental health facilities, and purchase or preserve housing dedicated to seniors.
Libraries and Community Services
The Governor’s Budget also includes $8 million to CENIC for broadband deployment and a one-time $5 million increase in grants for early learning and after school programs.
The above represents only the Governor‘s opening proposal. The legislature will have their own ideas to throw into the mix. Much potentially can and will change after the May Revise brings into focus alongside a clearer picture of the state’s true fiscal condition. Subcommittee hearings started in late January with the real heavy lifting after the May Revise. Staff will continue to monitor report on this throughout the year.
Environmental Review
There is no environmental impact.
Fiscal Impact
Unknown fiscal impacts are associated with the Governor's proposed budget at this time.
Attachment
None
Prepared by: Sean Harris, Management Analyst
Approved by: Jack Griffin, City Manager