CCAGW Urges California Assembly Appropriations Committee to Oppose SB 1410 | Council For Citizens Against Government Waste

CCAGW Urges California Assembly Appropriations Committee to Oppose SB 1410

State Action

August 17, 2020

California Assembly Appropriations Committee
State Capitol, Room 2114
Sacramento, California 95814

Dear Assembly Member, 

On behalf of the 260,664 members and supporters of the Council for Citizens Against Government Waste in California, I urge you to oppose SB 1410.

Until California’s state of emergency ends, SB 1410 will allow tenants the opportunity to defer rent payments, while continuing to occupy their lessors’ property.  The bill would legally obligate landlords in California to offer these rent deferment to tenants, and if the tenant accepts the deferral, all of the tenant’s back rent payments would immediately be transferred to the state government.  In addition to the rent deferments, landlords would also receive a transferable tax credit equal to the amount of the tenant’s unpaid rent, and they can redeem or sell the tax credits between 2024 and 2034.  It is expected that once the landlords collect their tax credits, the state’s tax revenues will plummet.

While it is expected that the tenants will slowly repay the debt owed to California, once the debt obligation is assumed, it will be serviced using taxpayer funds.  Whether the taxpayers are renters or owners, SB 1410 proposes to shift the tax burden to them through higher income, real estate development, sales, and excise taxes. 

This bill will further harm California’s already struggling budget for at least the next 15 years if it is signed into law.  According to one estimate, SB 1410 will cost the state of California at least $10 billion in revenues and force landlords across the state to relinquish their property rights.  According to a June 27, 2020 survey by the National Multifamily Housing Council, 94 percent of tenants in California are currently paying their rent.  While the desire to address the current rent crisis for the remaining six percent of renters is understandable, extending this temporary problem and expanding rent deferral to all renters resulting in higher taxes for the next 10 years is ill-conceived. 

I urge you to vote against SB 1410.  The bill imposes unfair economic burdens on landlords and taxpayers alike, and it will further harm the state’s budget deficit. 

Sincerely, 

Tom Schatz
President, CCAGW

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