Two unprecedented proposals to help Californians overcome the fiscal storm released by the coronavirus crisis are expected to be announced Tuesday by Democrats in the state Senate – one to help troubled tenants, the other to create a $ 25 billion economic recovery fund by issuing long-term $ 25 billion by issuing long-term vouchers for those who are willing to pay their future state income tax.

Together, these ideas suggest MPs are willing to launch trials that have never been tried to avoid unpaid debts and deep cuts to government services resulting from the Great Recession more than a decade ago.

“We need short-term assistance,” Senate President Pro Tem Toni Atkins (D-San Diego) said in an interview with The Times on Monday. “But we need to think long term about how to do this in a very strategic way.”

The proposal is scheduled to be officially formalized Tuesday morning in Sacramento, two days before Governor Gavin Newsom sent lawmakers a plan to erase short-term budget deficits that could reach more than $ 54 billion.

Neither the tenant assistance program nor the economic recovery fund will have a direct impact on the state budget in the coming weeks and months. However, lawmakers believe the two ideas could boost California’s devastated economy.

Unconventional efforts to help tenants will ask landlords to forgive lease payments in return for tax credits of the same size that are spread over a 10-year period starting in 2024. Tax credits will be transferable, meaning property owners can sell them to outside investors and get cash immediately .

“This is a substantive proposal that protects those who struggle to pay their rent and also protects rental property from confiscation,” said Senator Steven Bradford (D-Gardena). “This fair strategy will make people stay.”

Some local governments have stepped in to address concerns about tenants being evicted during the public health crisis, promoting various rental assistance programs. Legislation is pending in the Capitol building too attempt to prevent eviction during a coronavirus emergency, which was declared by Newsom in March and did not have a targeted end date.

The exact number of problematic tenants is unclear. By 2018, there were 17 million tenants in California, and more than half were rented.

Under the Senate proposal, the tenant will agree to return the state money for lease payments and will have 10 years to do it. Some people who can prove financial difficulties can get the total amount forgiven – as a result, their rent will be borne by the state.

The idea will depend on the willingness of the rental property owners to work together, and whether they see a long-term tax relief equal to the loss of short-term rental income. Atkins said he was optimistic, arguing that landlords benefit by keeping their property occupied.

“When you have to find a new tenant, it’s not an easy process,” he said.

The economic stabilization plan made by the Senate Democrats in response to the COVID-19 pandemic is even more ambitious. This will offer California taxpayers, from individuals to large corporations, the opportunity to pay income tax for a decade at a low discount. In total, the state will offer $ 30 billion in long-term tax credits of $ 25 billion in cash.

In essence, this will be an advance from long-term state tax revenues, using the money to fund short-term economic assistance programs, which can include small business assistance and assistance to local governments.

“This is truly the 21st Century New Testament,” said Sen. Bob Hertzberg (D-Van Nuys). “We have to get money into the system.”

Taxpayers can use vouchers to cover tax owed in the coming years or sell them faster to investors. That could make valuable documents for various investors, said John C. Carson Jr., president of Raymond James Financial.

“If the state issues such security that can be bought and sold in the secondary market, we hope that there will be strong interest from other institutions and investors,” he said in a statement.

By accelerating the collection of tax revenue that should have been paid more slowly, this program means less government cash to be spent by MPs in the future. Senate budget staff estimates a decrease in available income of $ 3 billion per year from 2024 to 2033.

They do not believe this program will affect constitutionally guaranteed tax money for public schools, because vouchers will be counted as part of annual tax revenue when cashed. However, such calculations can, however, direct a larger amount of actual tax revenue towards schools in those years and away from other programs.

Other key questions need to be addressed. It is likely to be easier to create a $ 25 billion economic recovery fund – estimated to be collected over two years – than to determine which of the country’s many needs must get help and which will be abandoned. A document provided to The Times by the Democratic Senate offered a series of initial suggestions, including retraining workers, accelerated infrastructure projects, forest fire prevention, and homeless help.

Atkins insisted his priorities would be clear. “It must be linked to the economy and critical needs,” he said.

It is also unknown how the two aid proposals will be screened either with Newsom or in the state Assembly. To have a direct effect, both must be considered together with a budget deficit plan which must be approved by the Legislature no later than 15 June. Democrats hold supremacy of seats in both houses and, in theory, approve both plans without a Republican vote.

For legislators who are in office during the last recession or whose services began shortly thereafter, the idea of ​​thinking outside the world of conventional government may have special appeal.

“You have to think differently,” Atkins said. “You have to rethink, reshape and want to adjust and consider new choices, because the world is different. The world has turned upside down. “