California lawmakers approve COVID-19 plan, including $ 600 checks

Californians who qualify for a $ 600 state stimulus payment could see the money arrive as soon as a month after filing their tax returns under a $ 7.6 billion COVID-19 economic relief package passed Monday by the Legislature. state.

Drawn up by Governor Gavin Newsom and legislative leaders last week, the pandemic assistance plan also includes more than $ 2.1 billion in grants and fee waivers for small businesses. Those companies can soon apply for the grants, followed by an approval process that state officials estimate would take 45 days.

The Legislature is expected to act on an additional $ 2 billion in tax breaks for businesses this week, bringing the total package to $ 9.6 billion.

Stimulus assistance for residents making $ 30,000 a year or less will come much faster – four to five weeks on average after they file 2020 tax returns with the state Franchise Tax Board if they also sign up for direct deposit, said HD Palmer, a spokesman for the California Department of Finance. The wait could last up to seven weeks for those who receive the $ 600 in a check from the state.

“This is such an important bill because it gives millions of hardworking Californians the instant money they desperately need during this difficult time, during this pandemic,” Assemblyman Phil Ting (D-San Francisco) said Monday during the debate before of the approval of the Legislature. half a dozen bills that make up the financial aid package. Newsom said he expected to sign the measures on Tuesday.

About 5.7 million payments totaling $ 2.3 billion will go to low-income Californians under the Golden State Stimulus program, which aims to help those in the most severe financial difficulties, said State Sen. Nancy Skinner (D-Berkeley).

“Our lowest paid workers have been disproportionately affected,” said Skinner, chair of the Senate Budget and Fiscal Review Committee.

The COVID-19 relief package was made possible by higher-than-expected tax revenues in California despite the economic hardships caused by the pandemic.

Approximately 3.8 million of the payments will go to households that qualified for the 2020 state earned income tax credit, which is available to residents earning less than $ 30,000 a year.

About 565,000 stimulus payments will go to with individual tax identification numbers who did not receive federal stimulus payments and whose income is less than $ 75,000, many of whom are immigrants in the country illegally. Taxpayers with individual identification numbers who also qualify for the California state earned income tax credit would receive a total of $ 1,200 in state stimulus.

The $ 600 stimulus payments will also go to 1.2 million people who receive money from federal supplemental security income programs or state supplemental payment programs, and 405,000 payments will be provided to participants in CalWORKS, the state program of social assistance to work. An additional 15,000 payments are planned for participants in the Immigrant Cash Assistance Program.

CalWORKS payments will be placed on EBT cards and issued to participants in mid-April, although the schedule could change based on the ability to automate the process, Palmer said. The timing and method of grant payment for SSI and SSP recipients is still being worked out and depends on discussions with the federal Social Security Administration, he added.

Stimulus checks of $ 600 for low-income residents could be enough to put food on the table for a month for a household and pay for utilities, said Maeve Elise Brown, executive director of the advocacy group Housing and Economic Rights Advocates. .

“It gives people time to start coming out of the pandemic shutdown,” Brown said. “It’s $ 600 that could be the difference for some people between surviving or not surviving.”

The provision of the aid package that generated the most debate in legislative hearings was the proposal to provide stimulus controls for immigrants in the country illegally.

State Senator Jim Nielsen (R-Gerber) questioned the provision of the money when the state budget, while level now, could suffer problems in the future if the COVID-19-related recession continues.

“This budget is going to create long-term obligations for the undocumented,” Nielsen said during a legislative debate.

Skinner noted that the stimulus control for immigrants it is a one-time payment, not an ongoing budget obligation, while State Sen. María Elena Durazo (D-Los Angeles) said the proposal for immigrants and other low-income residents is important but does not go far enough.

“I think it is a great step forward. It is an acknowledgment of all these low-wage workers … who are working hard and who have been disproportionately affected by unemployment, ”Durazo said. “I think there is room to include more people who are still not covered by our state or the [programs]. “

Immigrant advocates said many would not receive a stimulus check because they do not have individual taxpayer identification numbers, noting that immigrants also cannot get unemployment benefits or federal stimulus.

“This does not cover all of the relief that they have been excluded from, and as a result we are creating inequality,” Sasha Feldstein, manager of the California Immigrant Policy Center, told lawmakers during a budget hearing.

He noted that an immigrant household with two parents filing an ITIN and two children would be eligible for a maximum of $ 1,200 in state stimulus, which is about 21% of the federal relief from which they have been excluded.

“More is needed to protect thousands of excluded undocumented workers,” added Fanelly Millán, organizer with the Pomona Center for Economic Opportunity.

The aid package approved by the governor and the Legislature also provides $ 2.1 billion in grants of $ 5,000 to $ 25,000, a program administered by the California Office of the Small Business Advocate.

“This will help qualified small businesses that have been economically devastated by the COVID pandemic,” said State Senator Anna Caballero (D-Salinas), author of the grant bill. “As we know, small businesses across the state have continued to struggle to survive during stay-at-home orders.”

She cited a recent survey by advocacy group Small Business Majority that found that 35% of small businesses were within three months of closing if they did not receive additional financial help.

Assemblyman James Gallagher (R-Yuba City) said during Monday’s debate that the aid bill would not have had to be as big as it was if the state hadn’t forced businesses to close for so long.

“This governor arbitrarily and unilaterally decided to shut down most of the small businesses in this state, and as a result, many small businesses have already closed,” Gallagher told colleagues before joining the bipartisan vote to support the business grants bill. .

The Legislature’s approval of the grant money came a few months after Newsom launched the program with an executive order that provided $ 500 million in grant funding for 21,000 small businesses.

But the demand for grants is greater than the money available. In the first round of grants, 350,000 small businesses applied, seeking more than $ 4.5 billion, authorities said.

Businesses with annual gross income of up to $ 2.5 million are eligible. Because not all applicants will receive a grant, applications are graded and judged based on criteria including whether the company is in an industry hardest hit by the pandemic.

Applications will also be scored to ensure that there is wide geographic distribution and that businesses owned by people of color are fairly represented.

“Our commitment in that effort is to underserved communities and underrepresented communities, which means that we are going to be very aware of where those dollars are going,” Newsom said Monday during a news conference in Arvin.

Once a company is notified that it has been selected for a grant, it will face additional verification requirements before the money is disbursed, said Kaitlin Lewis, a state spokeswoman.

“All final awards will be completed within 45 business days after the close of a round and companies are verified and paid on an ongoing basis,” Lewis said.

A portion of the aid package that is scheduled to be voted on this week would allow businesses to deduct up to $ 150,000 in expenses covered by loans from the federal Paycheck Protection Plan. California small businesses obtained more than 750,000 PPP loans, authorities said.

Two years of fee waiver will also be provided for approximately 59,000 restaurants and bars licensed by the state Department of Alcoholic Beverage Control, according to bills passed Monday. They typically pay annual fees that range from $ 455 to $ 1,235. More than 550,000 hairdressing and cosmetology licenses will also have fee waivers.

Additionally, $ 50 million will go to grants for cultural institutions that have suffered financially from the pandemic. The package also includes grants for community college students and additional money for child care, food banks, diapers and housing for quarantined farm workers.

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