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California Governor Plans $ 4 Billion for Economic Recovery



After spending most of 2020 asking small businesses to shut down and restrict their customers, California Gavin Newsom on Tuesday suggested it would be $ 4 billion in government spending, which he said would help to survive in 2021.


Newsom was the first U.S. governor to issue a nationwide home order due to the coronavirus pandemic in March, and at the time deserved praise for decisive action to curb the spread. But the recent increase in cases has meant that these restrictions lingered in 2021, closing bars, restaurants, barber shops, gyms and movie theaters for months on end, while capacity in stores was severely limited during the year’s busiest shopping season.

These restrictions unequally affected the world’s fifth largest economy. While people with higher incomes kept their jobs by working at home, people with lower incomes, including retailers and restaurant workers, lost their jobs or were left unpaid because small business owners struggled to stay afloat during the pandemic.

The growing frustration over Newsom’s orders, even as virus – infected hospitals were overwhelmed, sparked an attempt at recall. Newsom unveils its new budget proposal on Friday. But on Tuesday, he offered a preview by revealing more than $ 4 billion in government spending aimed at creating jobs and helping small businesses.

Nearly half of the money, $ 1.5 billion, would help people buy electric cars and create jobs by paying for the charging stations drivers need to use them. The proposal is linked to Newsom’s plan to ban the sale of all new gas-powered cars in California by 2035.

Small businesses would receive $ 575 million. The money would be paid for grants of up to $ 25,000 each to small business owners. That money includes $ 25 million for small museums and art galleries that were forced to close during the pandemic. Newsom and the State Legislature have already given $ 500 million to this program, so this new proposal, if approved, would make more than $ 1 billion available to small business owners.


Some businesses may also be tax-exempt if they employ more workers. Last year, Newsom signed a law promising certain business owners a $ 1,000 credit on their state tax bill for the net increase of every new worker hired on Dec. 1. far. Newsom’s proposal would spend $ 100 million to expand the program.

The plan waived $ 70.6 million in various fees charged to businesses most affected by the pandemic, including barbers, beauticians, manicures, pubs and restaurants. And with a record number of people leaving the state, including tech giants Oracle and Hewlett-Packard, Newsom said it would give businesses $ 430 million in tax credits to stay in California and hire people.

Other benefits include another $ 50 million for a program that offers up to $ 100,000 loans to small businesses, $ 100 million to extend a sales tax exemption to reduce the cost of manufacturing equipment, and a proposal that Newsom says, the consequences of a restriction on federal deduction of income tax.

“These budget proposals reflect our commitment to a fair, broad recovery that ensures California is the best place to start and grow a business,” Newsom said in a news release.


Most of these proposals, if approved, will not take effect until July. But Newsom has asked state lawmakers to approve the $ 575 million for small business grants before then. The chairman of the meeting, Anthony Rendon, and the president of the Senate, Pro Tempore Toni Atkins, said that they would work with Newsom to act early to provide meaningful additional relief.

Member of Parliament Kevin Kiley, a Republican from Rocklin and one of Newsom’s chief critics in the Legislature, said Newsom’s proposal could modestly help some small businesses.

“What will help a lot more is if the governor stops shutting them down arbitrarily and harassing them,” he said. ‘Small businesses do not ask the governor for help. They ask him to get out of their way. ”

John Kabateck, state director of the National Federation of Independent Business in California, said Newsom’s proposals are “very useful steps toward restoring Main Street.” But he criticized Newsom for investing most of the $ 4 billion in electric car infrastructure, saying that money could be better spent on small businesses.


‘We have retailers, shoe store owners, restaurant owners, farmers and many more who are not sure they will be there in the next month or two, and any extra dollars our state has in the closet will have to be invested there. and not wasting on admirable but wrong priorities, ”he said.

Copyright 2021 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or distributed.

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