California AB-71 Proposes Tax Hike on Large Corporations to Fund State Homeless Programs
Photo by Philip Pilosian via Shutterstock
A proposal to increase tax rates on businesses with annual profits greater than $5 million to fund state homeless programs in California was announced on Jan 14. As of January 2019, the state had over 150,000 homeless people.
Taxes for these corporations would increase from 8.84% to 9.6%, said Christopher Martin, the policy director for Housing California.
This bill is estimated to raise more than $2 billion a year to house tens of thousands of homeless people. Proponents say the revenue from this bill would prevent families from falling into homelessness, expand emergency shelters, create more affordable housing and provide employment support for unhoused people.
Assembly Members Luz Rivas, Richard Bloom, David Chiu and Buffy Wicks co-authored this bill. Democrats, big city mayors and housing advocates are all major supporters of the legislation.
Oakland Mayor Libby Schaffer said, “ [AB-71] is the most inspirational answer to this crisis I’ve seen in my entire career in public service.”
Supporters say this measure would transform the state’s approach to solving homelessness because it would provide an ongoing source of state funding for the first time. There are at least 151,000 Californians who are currently homeless and the pandemic has exacerbated these conditions.
Opponents argue that this is not the right time to increase taxes on businesses that are struggling during the pandemic. CalTax is organizing a coalition to oppose the bill.
“Even if you say it’s just going to be on some big business tycoon in a pinstripe suit, the reality is it will impact prices for consumers in California and it will impact jobs,” David Kline, a spokesperson for The California Taxpayers Association said.
Several major Silicon Valley companies already announced they’re relocating because of California’s tax hikes, including Oracle and Hewlett-Packard Packard Enterprise.
“If we’re looking long-term at California’s economic and fiscal viability, this couldn’t be a worse tactic,” said Jim Wunderman, president and CEO of the pro-business Bay Area Council.
California’s homeless crisis has been an ongoing issue for Gov. Gavin Newsom. Last week, he was criticized for his 2021 budget, which did not include a permanent funding source for homeless housing and services.
This bill is attempting to address that. AB-71 is in the Housing and Community Development Committee, where Chiu, the committee chair, expects that legislators will vote on it in March.