The Coronavirus pandemic has wreaked havoc on California’s economy, leaving 1 in 5 Californians unemployed. California has the fifth largest economy in the world, and is home to 165 billionaires, whose wealth has grown by $175 billion from the pandemic. Some big corporations received massive bailouts from the federal government, and some small businesses have been able to secure some relief in the form of PPP loans However, relief is not trickling down to small businesses who need it most.
With no end to the pandemic in sight without the development of a vaccine, and with a federal government in gridlock, the state government has a responsibility to keep Californians and small businesses afloat. In the short term, the state needs to provide support for local governments such as expanding slow streets for small businesses to conduct business outdoors and incentivizing local governments to expedite permits to do so. In the long term, the state can explore fundamental changes to our economy such as jumpstarting the creation of a public banking system.
As State Senator, I will fight for:
A state-owned bank & no-interest loans for small businesses. During the COVID crisis, many small businesses were forced to stay closed for months, and some, like salons and barbershops, are still closed. These businesses can’t be expected to pay rent, as they have had no source of income since March. Without no-interest loans, only the giant corporations who can afford to bleed money for months without income will survive. It’s unfair to ask small businesses to go into terrible debt for following the rules of the shutdown and keeping all of us safe.
I have been working for the past few years on a public bank for San Francisco that would divest our city monies from Wall Street banks and re-invest in low-cost loans for small businesses, renewable energy, affordable housing, and public infrastructure. We passed AB 857 at the state level and we are looking forward to passing legislation in 2021 to create a state bank. North Dakota’s state-owned bank has been working hand-in-hand with state electeds to facilitate relief for small businesses hit hard by the Coronavirus pandemic. With a state bank, California could extend loans using bank capital to small businesses not just during the pandemic, but throughout recovery as well. A state-bank would keep dollars circulating in our state at a time we desperately need to keep our local economies going.
Reduce bureaucratic barriers for re-opening small businesses. As tens of thousands of businesses face indefinite closure during and after the COVID-19 pandemic, the State of California must champion an equitable economic recovery to revive the spirit of entrepreneurship that allowed California to build the world’s fifth largest economy in the world. Oftentimes, first-time entrepreneurs get trapped in red tape and high fees to acquire permits and licenses. We are seeing the same challenges for businesses trying to open outdoors. To mount a rapid recovery that doesn’t devastate our already struggling communities, we need to revamp our business approval processes to streamline and reduce startup costs, especially for legacy-, first-time, women-, LGBTQ-, Black-, Indiegnous-, and minority-owned businesses and co-operatives. The state should explore providing incentives for local governments to do this.
Restore jobs to Californians impacted by COVID-19 recession. Due to the economic devastation stemming from the COVID-19 pandemic, millions of Californians have been laid off or seen their workplaces shuttered. To begin healing our communities, the state legislature must require a right to return for all workers who were laid off due to shelter in place orders to be rehired by their employers.
Freeze on rent-hikes for commercial properties. Residential rent control in San Francisco and an indefinite freeze on rent hikes until the pandemic subsides has helped stabilize San Franciscan renters. However, commercial properties have been excluded from those valuable protections, leaving small businesses victim to permanent closure. By expanding rent control to all commercial property across the state, we can stabilize the small businesses that employed 1 in 4 Californians pre-shutdown.
Freeze taxes on small businesses and institute an excessive CEO-pay tax on the wealthiest corporations. California has a flat corporate tax rate that hurts small businesses but helps wealthy corporations. For the duration of the pandemic, we need to generate a revenue-positive strategy to freeze taxes on small businesses and raise tax rates on California’s largest and wealthiest corporations who aren’t paying their fair share.
Some of the biggest companies in the world call California their home--Disney, Wells Fargo, Google, Tesla, Facebook, and Apple, to name a few. California’s billionaires have earned $175 billion during the COVID-19 pandemic, and CEOs across the state earn 278 times that of the average worker in their firms. While these companies report rising profits every year, it has become nearly impossible to get by as a small business owner in our state. These companies need to pay their fair share, and a tax on CEOs making over 100 times that of the average worker to fund small business stabilization would be a step in the right direction. Such a tax would only apply to a handful of large corporations, and the fund will be able to support small businesses at risk of closing permanently.
Expanded education funding to retrain our workforce. In an increasingly knowledge-based labor market, higher education is just as much a necessity as primary education to compete in a modern economy. Through expanded investment in STEM, we will have the resources to mobilize a gigantic workforce to meet the state’s climate goals, transition to a green economy, and relieve our housing crisis. This will require re-investing in trade and apprenticeship programs to prepare people of all backgrounds with the skills they need to build affordable homes and renewable energy infrastructure. These kinds of Career Technical Education programs should cover everything from arts to architecture to entrepreneurship, so all students retain the right to choose the best fit for themselves.
Just-cause termination to protect California’s workforce. Under California law, employers are allowed to arbitrarily terminate employees at will, with no reason. This creates workplaces where employees are reluctant to raise concerns about misconduct, as they can be fired for bringing them to light, as has happened at Amazon, Google, and Facebook. Ensuring just-cause termination would create job security and improve working conditions at a time when both are deeply needed by the working people of our state.
Cultural Districts and Legacy Businesses. The economic crisis induced by COVID-19 has accelerated the threat of hypergentrification for low-income and marginalized communities and devastated once-bustling small business corridors. Entrepreneurship and small business have long been the economic foundation for working class Californians. San Francisco has innovated and set a model for California to follow, establishing cultural districts to ensure community representation and provide a voice in planning, hiring, and other processes to protect and revitalize small businesses and entrepreneurship under the threat of displacement. Additionally, legacy business programs provide valuable benefits and funding for longstanding businesses to ease the burden of rising operational costs.
Eliminate personal guarantee. Personal guarantees are agreements for small business owners to take personal liability if their business fails. This pierces LLC protections and is another way that small business owners are put at a disadvantage when competing with large corporations. This is an unnecessary barrier to starting a small business and needs to be eliminated in order to level the playing field.