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Governor announces the largest small business relief program in the nation
Gov. Newsom’s Plan expands the state’s COVID-19 Small Business Relief Grant program to a total of $4 billion, representing the largest such program in the entire country.
That’s in addition to Gov. Newsom’s $6.2 billion tax cut for those businesses hit hardest by the pandemic, the largest state tax cut of its kind in history.
“Our small businesses have faced unprecedented challenges over the past year, and we’re stepping up to meet the moment – making historic investments to provide businesses with the support they need and jumpstarting California’s economic recovery,” said Gov. Newsom. “That’s why we’re implementing the largest small business relief program in the entire country, expanding the small business grant program to $4 billion and providing $6.2 billion in small business tax relief. This is money in the pockets of business owners to make payroll and cover the bills as we prepare to fully reopen California’s economy on June 15.”
These grants are already supporting diverse small businesses throughout California, with 88.3 percent of grants in rounds one and two going to minority/people of color-owned businesses, women-owned businesses, veteran-owned businesses and businesses located in low to moderate income communities.
To date, approximately 198,000 small businesses and nonprofits either have been or will be awarded grants, which includes finalized awards for 43,874 small businesses and nonprofits representing all 58 California counties for a total of $475,001,244.
By expanding this successful program, we can ensure that even more small businesses can access this critical lifeline as we head toward full reopening on June 15.
In addition to these historic programs, Gov. Newsom has taken swift action to invest in those sectors of the economy that are crucial to California’s recovery, including:
— Estimated $895 million investment in the State Small Business Credit Initiative (SSBCI), which works to strengthen state programs that support financing of small businesses;
— Increasing the CalCompetes tax credit program to $360 million, and establishing a one-time $250 million grant program, to incentivize businesses to relocate to California;
— $250 million investment in California’s ports to address revenue loss and bolster future economic activity;
— $200 million to expand sales tax exclusions through the California Alternative Energy and Advanced Transportation Financing Authority to promote, grow and incentivize green manufacturing in California;
— $147 million for the Main Street Small Business Tax Credit to assist small businesses that have hired and retained workers since the second quarter of 2020;
— $95 million to jumpstart California’s tourism industry, one of the largest economic drivers in the state that was particularly impacted by the pandemic.
McGuire, Quirk-Silva highlight funds for tourism
In response to the news of the funds for the tourism industry, Lake County’s member of the State Senate, Mike McGuire, and Assemblymember Sharon Quirk-Silva came out with strong praise for the plan.
“California’s tourism economy, $145 billion strong in 2019, cratered during the pandemic. Hundreds of thousands of hospitality workers were unemployed and state and local governments took a $6.6 billion hit due to lost taxes. We’ve been working for over a year with CalTravel on a recovery plan to help get hard working Californians safely back to work and the tourism sector reopened in partnership with the California Department of Public Health,” McGuire said.
“The governor’s announcement this morning will be a massive shot in the arm to the Golden State’s economy and help thousands of tourism-based businesses in every corner of California open their doors, rehire tens of thousands of employees and put out the welcome mat to travelers. We look forward to getting this funding proposal across the budget finish line in the coming weeks,” McGuire added.
Sen. McGuire worked in partnership with Assemblymember Quirk-Silva and a broad-based coalition on SB 285 over the past year and a half making the $95 million tourism investigation a reality, with the partnership including CalTravel, representing California’s tourism and hospitality sectors; California Teamsters Public Affairs Council, representing thousands of hotel and hospitality workers; California News Publishers Association, representing California newspapers; and the California Broadcasters Association, representing California’s TV and radio stations.
“I have advocated to assist our tourism attractions, such as Disneyland, Universal Studios, and Knott’s Berry Farm to return back to business, as we have seen a significant impact these theme parks have for our surrounding local businesses,” said Quirk-Silva. “As the state continues to work towards reopening, many of our tourism attractions are facing significant deficits. With many of them working on plans for reopening to the public, this one-time stimulus funding, that would double the initial requested amount of $45 million will help accelerate our tourism industry return and help get Californians back to work.”
This campaign, in consultation with the California Department of Public Health, will emphasize when it is safe to travel and how to travel safely.
The boost will deliver more than $10.3 billion in revenue to California businesses and nearly $1 billion in additional state and local tax revenue, McGuire’s office said.
Before COVID-19, more than 1.2 million California workers earned their livelihoods in hospitality, and visitors spent $145 billion annually at California businesses, generating $12.3 billion in state and local tax revenues.
The coronavirus has had an especially devastating impact on California’s travel and tourism industry. Since last March, more than half of those 1.2 million hospitality workers lost their jobs, California lost $78.8 billion in visitor spending, and thousands of businesses have struggled to keep their doors open, even if only virtually.
SB 285, now included in this year’s proposed budget, provides funding to Visit California to launch a strategic media and jobs recovery campaign to promote California travel to support the businesses that have been hit so hard – the state’s renowned restaurants, hotels, and local destinations. Visit California will multiply the value of the appropriation through newspapers and broadcast media, which have agreed to match the funds from the state.