SACRAMENTO, Calif. - California Gov. Gavin Newsom signed a $7.6 billion coronavirus relief package on Tuesday that will give at least $600 one-time payments to 5.7 million people while setting aside more than $2 billion in grants for struggling small businesses.
Newsom signed the law as Congress is debating a much larger stimulus package for the nation, a proposal that could also put money into the pockets of most Americans. And it comes as the first-term governor is facing a recall effort fueled in part by widespread anger over his handling of the coronavirus, particularly its impact on businesses.
"The backbone of our economy is small business. We recognize the stress, the strain that so many small business have been under," Newsom said at a bill-signing ceremony at Solomon’s Deli in Sacramento. "And we recognize as well our responsibility to do more and to do better to help support these small businesses through this very difficult and trying time."
The package includes:
- $3.8 billion in Golden State Stimulus direct payments to low-income individuals and families
- $2.2 billion for small businesses, nonprofits, and cultural institutions
- $1.6 billion in aid to community college students, childcare providers, food and diaper banks and other essential services, and to restore cuts made last year to UC and CSU
The Newsom administration still bans indoor dining in most of the state while limiting how many people can enter retail stores at the same time. Newsom has said Tuesday the state will ease those restrictions in five counties, with more to come in the coming weeks as the number of new infections have fallen in recent weeks along with coronavirus-related hospitalizations.
Newsom used his emergency powers in November to set aside $500 million for small business grants. In the first round of funding, the program received more than 334,000 applications totaling more than $4.4 billion in requests.
The law Newsom signed on Thursday puts another $2 billion into that program. Businesses with annual revenues between $1,000 and $2.5 million are eligible for the money, with a priority given to businesses owned by women and minorities and businesses in areas with high unemployment rates.
"Relief is on the way to California families and businesses hit hardest economically by the pandemic," Sen. Skinner, D-Berkeley, said in a statement. "The actions we took will be especially helpful to families and small businesses that were excluded from federal stimulus payments."
The Legislature will likely approve more aid for businesses next week. Lawmakers had planned to pass a bill on Monday that would have let businesses deduct up to $150,000 in expenses covered by federal loans from their state taxes — a $2 billion benefit over six years. But they decided to amend the bill to let businesses deduct more than $150,000 from their taxes, raising the price tag for the state to about $2.3 billion, Newsom said.
Once that law is passed, it will bring the total state stimulus package to just under $10 billion.
"That’s big even for California standards," Newsom said.
The package includes $3.7 billion to pay at least $600 in one-time payments to about 5.7 million people. Most of these people will get the money by claiming the California-earned income tax credit on their tax returns. In general, those are people who make $30,000 per year or less.
The money will also go to people who earn under $75,000 per year and use an individual taxpayer identification number to file their income taxes. These are people who don’t have Social Security numbers, including immigrants who were ineligible for the federal stimulus payments Congress approved last year.
Under the Golden State Stimulus, low-income Californians and undocumented taxpayers who file ITIN returns will receive $600 stimulus payments as soon they complete their 2020 tax returns. In addition, CalWORKs recipients and those who receive Supplemental Security Income or Cash Assistance Program for Immigrants funds will also receive $600 payments.
KTVU contributed to this report.