Newsom calls for spending on tourism, tax breaks and more in new business relief plan
Gov. Gavin Newsom is ready to spend on tax breaks, tourism and poaching employers from other states as he crafts a multi-billion dollar plan to help businesses recover from COVID-19.
He announced a business relief plan Thursday as part of the state budget proposal he’s unveiling this week. Flush with a historic $75 billion surplus, Newsom and the Legislature have a lot of resources to assist companies and people set back by the pandemic.
Newsom’s proposal would pour an additional $1.5 billion in COVID-19 relief grants for small businesses, building on a previous $2.5 billion allotment he and the Legislature approved earlier this year.
Businesses that earned less than $2.5 million in annual revenue based on their most recent tax return would eligible for up to $25,000. Businesses must be impacted by the COVID-19 in some ways to be eligible.
California has already distributed $500 million to more than 43,000 businesses. Nearly 200,000 businesses and nonprofits either have been or would be awarded grants if the Legislature approves the spending, Newsom’s office said in a press release.
“It is the resilience of the small businesses, it is the resilience of those that put everything out on the line, make a go of it, that creates jobs and real economic engine of the prosperity that we are now enjoying in this state,” Newsom said at an event hosted by the Sacramento Host Committee and the California Chamber of Commerce.
Buoyed by a $75 billion surplus and a $27 billion aid from the federal government, Newsom has spent this week outlining how he wants California to spend the money. The Legislature would have to approve his proposals for them to take effect.
Newsom also said he wants to increase the California Competes Tax Credit, known as CalCompetes, which gives money for businesses based on creating and retaining jobs, from $180 million per year to $360 million.
He also called for a $250 million one-time grant program to provide incentives for businesses to relocate to California.
Newsom announced plans for a $250 million investment in the state’s ports, $200 million to grow green manufacturing, as well as a proposal to spend $95 million for Visit California to boost marketing for the tourism. He also called for increases in the state’s film tax credit, aiming to make California more competitive against other states attracting the industry.
“Georgia, we are not going to be passive anymore,” Newsom said.
More money would be given to help businesses retain and hire workers, through the state’s Main Street Small Business Tax Credit, he said.
California Chamber of Commerce President and CEO Allan Zaremberg praised Newsom’s proposal in a statement, while calling for legislators to “not diminish the positive impacts by enacting costly, onerous new regulations.”
The National Federation of Independent Business, an advocacy organization for small businesses, called Newsom’s proposal a “welcome news for mom-and-pop enterprises that have been hanging on for dear life this past year.”
“They don’t need more debt, they need resources that will get their lights back on, people back to work, and communities growing once again, which is why grants are the ideal resource,” NFIB California State Director John Kabateck said in a statement.
Earlier this week, Newsom announced a proposal to send $600 checks to Californians making under $75,000 a year, as well as rent and utility relief and more investment in schools and infrastructure, among others.
Newsom will unveil his full budget proposal on Friday.
This story was originally published May 13, 2021 at 11:20 AM.
