GSEC leadership says SB 939 could destabilize market conditions

Contact: Elizabeth Jones
ejones@greatersacramento.com
(916) 287-9072

05/28/2020

(Sacramento, CA) – The Greater Sacramento Economic Council’s leadership has voted to oppose SB 939 for its potential to erode business confidence in California and undermine the tax base. The Greater Sacramento Economic Council (GSEC) has written a letter to the Governor and California State Senators, urging them to scrap the bill that they say will cause severe economic harm to the California economy and impair recovery.

“This continuous market interference is going to be one of the reasons California will have a slower recovery than we should. These policies continue to undermine California businesses giving competing markets like Texas and Utah, an easy advantage to drive business out of the state,” said Barry Broome, President & CEO of GSEC.

Senate Bill 939 intends to provide rent relief to small businesses, bars, restaurants, or entertainment venues by providing, a temporary moratorium on evictions due to COIVD 19. The bill allows tenants to renegotiate or terminate existing leases throwing the market into a tailspin.

“No landlord is interested in evicting any business that can possibly survive and return. Small businesses are their clients and there aren’t enough businesses in the market to go around. The University of Chicago recently released a report that 42% of the job base has been permanently destroyed. Landlords will be doing everything possible to save the small businesses that are their clients. This bill will send shockwaves to the capital markets and further hurt the development of affordable housing by hurting small banks and local developers,” said Broome.

Broome says the bill undermines the real estate and banking system which translates into problems for affordable housing, the education system, policing and dozens of other public institutions relying on the tax base. He goes on to say that if the California State Senate is truly serious about helping small businesses recover from the most severe economic downturn since the Great Depression that they should repeal PAGA (Private Attorney’s General Act), and AB 5.

“The harassment of Uber and the GIG economy through AB 5 hurts our communities’ job base. Now with SB 939, we are sending another message to the market place that you can’t trust California to operate with consistency. There is no data or evidence on this bill to justify the actions. Washington, Colorado, NY and Minnesota are democratic lead states that do not create these economic policies that threaten employers for putting investment in their communities. Other states will be targeting our employers. ” said Broome.

About the Greater Sacramento Economic Council

The Greater Sacramento Economic Council is the catalyst for innovative growth strategies in the Capital Region of California. The organization spearheads community-led direction to retain, attract, grow and scale tradable sectors, develop advanced industries and create jobs and investment throughout a six-county region. Greater Sacramento represents a collaboration between local and state governments, market leaders, influencers and stakeholders, with the sole mission of driving inclusive economic growth. The Greater Sacramento region was founded on discovery, built on leadership and fueled by innovation.