Newsom to Call for $4.5B to Support Businesses, Jobs in Proposed State Budget
Gov. Gavin Newsom is expected to unveil his proposed budget Friday for the 2021-2022 fiscal year, with an estimated $4.5 billion earmarked to help the state’s economy recover once the COVID-19 pandemic fades.
Newsom said this week that he will propose allocating $575 million for grants of up to $25,000 for the state’s small businesses that have been negatively affected by the pandemic.
The grant funding would be allocated in addition to the $500 million the state previously allocated for small businesses.
About $25 million in grants would also be reserved for small cultural institutions like museums and art galleries.
“These budget proposals reflect our commitment to an equitable, broad-based recovery that ensures California remains the best place to start and grow a business – and where all Californians have an opportunity to reach their dreams,” Newsom said in a statement.
The proposal includes $500 million to develop upwards of 7,500 units of long-term housing by issuing to developers grants intended to cover the costs of aspects like sewers and site preparation.
It also includes $600 stimulus payments to 2019 taxpayers who received an earned income tax credit from the state and 2020 taxpayers who have Individual Taxpayer Identification Numbers.
Residents with an annual income of $30,000 or less are eligible for the tax credit, while ITIN taxpayers include people like undocumented residents who were not eligible for federal stimulus payments.
What is ultimately trimmed and removed entirely from Newsom’s proposal will hinge on several factors, including the potential of another federal relief bill after President-elect Joe Biden’s inauguration.
While the Coronavirus Aid, Relief and Economic Security Act, which was passed last March, included funding for state and local governments, the more recent stimulus package passed at the end of December did not.
The proposal includes more than $500 million in tax credits for businesses that stay in the state, create new jobs and hire former employees as well as a $1.5 billion investment in bulking up the state’s renewable energy infrastructure.
That infrastructure would support Newsom’s September 2020 executive order banning the sale of all new gasoline-powered passenger vehicles by 2035.
“I look forward to continuing to partner with the legislature to advance these priorities so our economy can emerge stronger, fairer and more prosperous than before,” Newsom said.