California Governor Gavin Newsom signed a $ 7.6 billion contractaid package Tuesday that will award 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 while Congress is debating a much larger stimulus package for the nation, a proposal that could also put money in the pockets of most Americans. And it comes as the governor in his first term is faced with an impeachment effort fueled in part by widespread anger over his handling of the coronavirus, particularly its impact on business.
“The backbone of our economy is small businesses. We recognize the stress, the strain that so many small businesses have been under,” Newsom said at a law signing ceremony at Solomon’s Deli in Sacramento. “And we also recognize our responsibility to do more and do better to help support these small businesses in this difficult and difficult time.”
The Newsom administration still bans indoor dining in most of the state and limits the number of people who can enter retail stores at the same time. Newsom said Tuesday that the state will ease those restrictions in five counties, with more to come in the coming weeks as the number of new infections has declined 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 for a total of more than $ 4.4 billion in applications.
The law Newsom signed into law Thursday puts another $ 2 billion in that program. Businesses with annual revenues between $ 1,000 and $ 2.5 million are eligible for the money, with a priority given to minority- and women-owned businesses and businesses in areas with high unemployment rates.
The Legislature is likely to pass more help for businesses next week. Lawmakers had planned to pass a bill on Monday that would have allowed companies to deduct up to $ 150,000 in expenses covered by federal loans from their state taxes, a benefit of $ 2 billion over six years. But they decided to amend the bill to allow businesses to deduct more than $ 150,000 from their taxes, raising the price for the state to about $ 2.3 billion, Newsom said.
Once that law is passed, it will raise the total state stimulus package to just under $ 10 billion.
“That’s important even by California standards,” Newsom said.
The package includes $ 3.7 billion to pay at least $ 600 in one-time payments to approximately 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, these are people who make $ 30,000 per year or less.
The money will also go to people who earn less than $ 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 weren’t eligible for the federal stimulus payments that Congress passed last year.