The California governor plans $ 4 billion to restore the economy


SACRAMENTO, California (AP) – After spending much of 2020 on small businesses refusing to close and restrict their customers, California Governor Gavin Newsom on Tuesday proposed $ 4 billion in public spending, which he says will help them survive in 2021.

Newsom was the first U.S. governor to introduce a nationwide home order due to the March coronavirus epidemic, and it was then praised for taking decisive action to curb the spread. But due to recent incidents, these restrictions have dragged on until 2021, with bars, restaurants, hairdressers, gyms and movie theaters crammed for months, while setting strict limits on the capacity of retail stores during the busiest shopping season of the year.

These restrictions have unevenly affected the world’s fifth largest economy. While those on higher incomes kept their jobs by working from home, those on lower incomes, including retail and restaurant workers, either lost their jobs or went into unpaid afterwork as small business owners tried to stay afloat during the pandemic.

Frustration with Newsom’s orders – even when viruses flood hospitals – has made a recall effort. My news is preparing to release its new budget proposal on Friday. But on Tuesday, he offered a preview by unveiling more than $ 4 billion in public spending to create jobs and help small businesses.

Half of that money – $ 1.5 billion – would help people buy electric cars and create construction jobs by paying for the charging stations needed by drivers. 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 pay subsidies of up to $ 25,000 each to small business owners. This 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, will make more than $ 1 billion available to small business owners.


Some businesses may also receive a tax credit if they hire more employees. Last year, Newsom signed a law that promised certain business owners a $ 1,000 credit to their state tax account for a net increase in every new employee hired by Dec. 1. More than 9,000 businesses have seized $ 54 million from this loan, according to the government’s office, so far. Newsom’s proposal will spend $ 100 million to extend the program.

The plan would release $ 70.6 million in various fees for businesses most affected by the epidemic, including hairdressers, beauticians, manicurists, bars and restaurants. A record number of people are leaving the state – including technology giants Oracle and Hewlett-Packard – Newsom said it is giving $ 430 million in tax breaks to businesses to stay in California and hire people.

Additional benefits include an additional $ 50 million for a program that offers up to $ 100,000 in credit to small businesses, $ 100 million to extend sales tax exemption to reduce equipment manufacturing costs, and a proposal by Newsom to ease the impact on the cap. effect. federal income tax deduction.

“These budget proposals reflect our commitment to a fair, broad-based recovery that will ensure California remains the best place to start and grow the business,” Newsom said in a press release.

If most of these proposals are approved, they would not enter into force until July. But Newsom has asked state lawmakers to approve $ 575 million to support small businesses beforehand. Anthony Rendon, chairman of the assembly, and Pro Tempore, Toni Atkins, chairman of the senate, said they would work with Newsom to “take early steps to provide substantial further assistance”.

Kevin Kiley, a Republican from Rocklin, one of Newsom’s top critics in the legislature, said Newsom’s proposal could modestly help some small businesses.

“It would help a lot more if the governor stopped stopping and harassing them arbitrarily,” he said. “Small businesses don’t ask for the governor’s help. They are asked to get out of their way.

According to John Kabateck, California’s state director for the National Association of Independent Businesses, Newsom’s proposals are “very useful steps toward restoring Main Street”. But he criticized Newsom for investing much of the $ 4 billion in electric car infrastructure, saying the money could be better spent if it were given to small businesses.

“There are retailers, shoe store owners, restaurant owners, farmers and many others who aren’t sure they’ll be there in the next month or two, and every spare dollar our state holds in the coffers needs to be invested there. and not wasted on admirable but mismanaged priorities, ”he said.

—-

This story was corrected so that John Kabateck is the state director of the National Association of Independent Businesses, not the California Small Business Association.