SBE News

GSBE Business Update 03/31/2021

By nominating Assemblymember Rob Bonta to be California’s next attorney general, Gov. Gavin Newsom is priming the state to take a significantly different approach to criminal justice — one that could help him shore up progressive support ahead of a likely recall election but could also alienate moderates and law enforcement. If confirmed by the state Legislature, Bonta will take over the position vacated by Xavier Becerra, who was confirmed last week as President Joe Biden’s health and human services secretary.

Bonta, an Oakland Democrat, would be the state’s first Filipino American attorney general, representing Newsom’s third historic and high-stakes appointment in the same number of months. The governor faced pressure to choose an Asian American as the state’s top prosecutor amid a surge in anti-Asian harassment and violence. Bonta’s record as one of the most liberal members of the Assembly signals he will likely get involved in cases of police misconduct. Bonta co-authored a new law requiring the attorney general to investigate all deadly police shootings of unarmed civilians. He also co-wrote the 2018 law abolishing cash bail — which, ironically, voters overturned in November by rejecting Prop. 25.


Details of President Joe Biden’s long-awaited infrastructure package emerged earlier week as the administration ramps up for its second major legislative push after passing the $1.9 trillion American Rescue Plan earlier this month. Physical improvements to roads, bridges, rail lines, ports and the electric grid alone could account for nearly $1 trillion of Biden’s forthcoming Build Back Better infrastructure program. The physical infrastructure portion of the Build Back Better program would include clean energy upgrades, a stable of electric-vehicle charging stations across the country, development of a 5G telecommunications network, rural broadband deployment, 1 million affordable and energy-efficient housing units and advanced training for millions of workers. 

How this plan gets paid could necessitate more parliamentary maneuvering by Democrats using the budget reconciliation process, as they did with the American Rescue Act. President Biden has proposed raising the corporate tax rate from 21% to 28%, as well as increasing taxes on individuals making $400,000 a year or more and raising the top marginal income tax bracket from 37% to 39.6%.


CTC held a two-day committee hearing this week to discuss numerous transportation policies, including unveiling their Draft Climate Action Plan for Transportation Infrastructure (CAPTI), which seeks to leverage state transportation spending to help meet state climate goals. We testified (and submitted the attached letter) before the committee and ask that more time be allocated to the review process and that the CTC conduct a specific outreach meeting with business and industry leaders, as it has with other stakeholders, to collect important feedback on the plan’s economic impacts. Based on the additional calls for outreach (the business/industry folks were the only ones asking for more time) the CTC directed staff to hold additional workshops, including specific workshop with the business community. Chair Norton asked that CTC lead those workshops, and Executive Director Mitch Weiss said he would work that out with CalSTA. Director Mitch also said they would attempt to hold those specific workshops prior to the CAPTI deadline and that the CAPTI is intended to be a “living document”. Additional workshops for public input are scheduled for late April; final CAPTI release planned for June 20201; and submittal of plan o Governor and the Legislature by July 15, 2021.


If a package of ambitious housing bills proposed by top Senate Democrats becomes law, duplexes and small apartment buildings could spring up on single-family lots; public housing projects could dot the skyline of larger cities; and housing developments could emerge amid vacant strip malls and big-box stores. But to get there, the state will first have to grasp more control of housing from cities and counties — and that’s not a fight local governments are going to give up easily. Already, some cities have announced their opposition to the proposals, even as affordable housing, and homeless advocates plan to unveil an agenda that goes even further than the lawmakers’. Here’s an overview of what the Senate Democrats are proposing:

  • Changing zoning to allow more dense housing at affordable prices (allow a duplex on single-family lots or split them without requiring a hearing or approval from the local government)
  • Creating exceptions to California’s strict environmental review process to permit new and denser housing.
  • Using bond money to build affordable housing.


By now you know that a lot of money is flowing into California — and a significant amount comes with very few strings attached, raising questions about how it will be spent and who will make those decisions. If lawmakers approve Gov. Newsom’s proposed budget, there would be “no reasonable checks and balances on the governor’s COVID-19 spending authority,” and he would also have virtually unlimited control over billions of dollars in federal stimulus, according to a recent report from the nonpartisan Legislative Analyst’s Office. As lawmakers debate these provisions, financial requests are pouring into the Capitol. Among them:

  • A coalition of county governments, hospitals and nonprofits want $8 billion for broadband internet.
  • The California Cable and Telecommunications Association wants $1 billion for a high-speed internet development program.
  • The California Chamber of Commerce wants the state to pay down its staggering unemployment insurance debt.
  • The California Medical Association wants to expand health care coverage.
  • State employees want their salary cuts to be reversed.


Earlier this week, nine more counties moved into less restrictive reopening tiers, leaving just eight counties containing around 6% of California’s population in the most restrictive purple tier. Six counties — including Marin, San Francisco and Santa Clara — moved into the orange tier, which increases the capacity at which restaurants, gyms and movie theaters can operate indoors while also clearing the way for offices to reopen. It’s an especially promising development for San Francisco, whose downtown is reeling amid a prolonged — and for some companies, permanent — shift to remote work. Three counties — Solano, Contra Costa and San Luis Obispo, have opened vaccine eligibility to those 50 and older. The state recently permitted nursing homes and long-term care facilities to hold indoor family visits. And last week, it allowed hospitals in the vast majority of counties to welcome up to two visitors for most patients. One patient recovering from COVID-19 finally started eating after a family member was allowed to bring home-cooked meals into a Fresno hospital.


This week, Employment Development Department’s website was unable to process claimants’ information submitted from last weekend. “Some customers are experiencing issues using these services,” a pop-up on EDD’s benefits registration webpage read Monday. “We’re working to restore service as soon as possible. Please check back later.” EDD spokesperson Loree Levy acknowledged “an intermittent issue,” but said more than 500,000 people were still able to get through and certify claims.

What exactly “an intermittent issue” means is unclear — but what is clear is that EDD is digging itself into an ever-deeper hole of backlogged claims. For seven straight weeks, the logjam of claims has topped 1 million — meaning it’s actually larger than it was last July, when Gov. Gavin Newsom vowed to clear the then-backlog of nearly 1 million claims by the end of September.

Meanwhile, the department is about to face yet another deluge of claims required for the thousands of Californians who have been unemployed for 12 months. And EDD, which just began certifying on March 7 the federal unemployment benefits from the December stimulus package, said last week it will take until April 10 — or April 30, in some cases — to begin certifying benefits from the stimulus package signed by President Biden.


Steyer’s decision to poll himself as a possible replacement does suggest he’s entertained the possibility. At a minimum, it is one of the few concrete examples of a Democrat weighing the opportunities and landscape of a post-Newsom California. Newsom’s team is warning Democrats not to break ranks with the governor, arguing that having even one serious contender from his party engaged in the election would offer a clear alternative to Newsom and give voters the incentive to vote for the recall. Read more here.


California Department of Fair Employment and Housing released guidance on requiring employees to vaccinate against COVID-19. To learn more about when a business can require employees get vaccinated, click here and visit DFEH’s FAQs here


Under the CA COVID-19 Rent Relief program both income-eligible renters who experienced pandemic related financial hardships or landlords who experienced income loss due to unpaid rent are eligible for financial assistance. To apply or check eligibility requirements, click here.