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Senate Leaders Unveil Proposed State Budget Approach, Proposal to Aid California’s Economic Recovery


As the California State Senate returns to the Capitol and resumes session this week, Senate President pro Tempore Toni G. Atkins (D-San Diego), along with Senators Holly J. Mitchell (D-Los Angeles), Steven Bradford (D-Gardena), and Robert M. Hertzberg (D-Los Angeles), unveiled the Senate Democratic Caucus’ proposal for the state budget and California’s economic recovery.

The budget approach aims to keep the budget balanced over a multi-year period through pragmatic spending decisions, use of reserves and other traditional solutions, and federal support. Senate Democrats also are proposing two specific recommendations that would aid California in rebounding from the deep economic impacts of the COVID-19 health crisis. As California so often leads the way, our roadmap to a just and equitable recovery can serve as a model for the rest of the nation.

“Our goal is to offer ideas for our state budget and economic recovery that take a responsible approach to planning for our state’s spending, while also keeping in mind the needs of Californians, millions of whom have been adversely impacted by the pandemic,” said Atkins. “This approach protects our state and communities by aiming to avoid major ongoing program cuts and not increasing broad-based taxes for middle-class Californians. We must do all we can to help heal our economy, while ensuring that our solutions do not create further harm.”

“Senator Mitchell will lead the Senate’s budget efforts again this year. Her experience, including leading our Special Budget Subcommittee on COVID-19 Response, will ensure the Senate crafts the best budget possible for the people of California during this crisis,” continued Atkins.

“Although this will be a difficult budget, thanks to this last decade of responsible budgeting, California is better positioned than ever to deal with a fiscal downturn,” said Mitchell. “In crafting the budget in the next few weeks, we must use the reserves that we have built, other available tools, and any additional federal relief that we may receive in an efficient and effective manner that avoids exacerbating both short and long-term problems created by the COVID-19 crisis.”

Senators also made two recommendations aimed at helping Californians and the state’s economic recovery. The proposals result from the ongoing efforts of the Senate Democrats’ Working Group on Economic Recovery.

The first proposal, which focuses on renter and landlord stabilization, would create a program enabling agreements between renters, landlords, and the state to resolve unpaid rents over a limited time period. The program would allow renters to receive immediate relief for unpaid rent and protection from eviction, and repay past rents, without interest, to the state over a 10-year period, beginning in 2024. Landlords would provide rent relief and commitment not to evict tenants in exchange for tax credits from the state equal to the value of the lost rents, spread equally over tax years 2024 through 2033.

“The California Senate is focused on helping those at risk of losing their home during this crisis,” said Bradford. “This is a substantive proposal that protects those who are struggling to afford their rent and also keeps rental properties from going into foreclosure. This equitable strategy will keep people housed. It will also prevent financial ruin for many families by allowing them to keep the assets they have worked so hard to build. That is how we care for the most vulnerable.”

The second proposal would create a $25 billion Economic Recovery Fund through establishment of prepaid future tax vouchers from 2024 through 2033. The funds could be used to create jobs and provide a myriad of services and resources, from small business and worker assistance and retraining to wildfire prevention response and schools most harmed by campus closures.

“Over the past many weeks, our leadership has been working around the clock to develop the kind of economic recovery that works for everyone,” Hertzberg said. “Now is the time to explore more creative ways to help financially stabilize this new era in California, and it’s our cautious optimism and careful planning that’s going to get us there as we all move forward together.”

Slides Budget Approach & Economic Recovery >>