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California Governor Gavin Newsom signed $ 7.6 billion coronavirus Relief program on Tuesday that will offer at least $ 600 in one-time payments to 5.7 million people while reserving more than $ 2 billion in grants for struggling small businesses.
Newsom signed the law as Congress debated a much broader stimulus package for the nation, a proposal that could also put money in the pockets of most Americans. And it comes as the first-term governor faces a recall 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 business. We recognize the stress, the strain that so many small businesses are under,” Newsom said during a bill signing ceremony at Solomon’s Deli in Sacramento. “And we also recognize our responsibility to do more and do better to help these small businesses through this very difficult and trying time.”
The Newsom administration still bans indoor dining in most states while limiting the number of people who can enter retail stores at one time. Newsom said on Tuesday the state would 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, alongside coronavirus hospitalizations.
Newsom used its emergency powers in November to set aside $ 500 million for small business grants. In the first round of funding, the program received over 334,000 requests totaling over $ 4.4 billion in requests.
The law Newsom signed on Thursday allocates an additional $ 2 billion to the program. Businesses with annual revenues between $ 1,000 and $ 2.5 million are eligible for this money, with priority given to businesses owned by women and minorities and businesses in areas with high unemployment.
The legislature will likely approve more business aid next week. Lawmakers planned to pass a bill on Monday that would have allowed businesses to deduct up to $ 150,000 of 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, which brought the price to the state to around $ 2.3 billion, Newsom said.
Once this law is passed, it will bring the state’s total stimulus package to just under $ 10 billion.
“It’s big even for California standards,” Newsom said.
The package includes $ 3.7 billion to pay at least $ 600 in one-time payments to around 5.7 million people. Most of these people will get money claiming the California Earned Income Tax Credit on their tax return. Typically, these are people who earn $ 30,000 a year or less.
The money will also go to people who earn less than $ 75,000 a year and who use a taxpayer identification number to file their income tax returns. These are people who do not have a Social Security number, including immigrants who were not eligible for federal stimulus payments approved by Congress last year.
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