Gov. Gavin Newsom’s Legislative COVID relief is a step in the right direction for small businesses but more needs to be done, according to the NFIB.
The state economic relief package was passed by the Legislature last week.
“NFIB is returning to the table with some bipartisan support to ensure that small businesses are getting liability protection this election cycle,” said John Kabateck, NFIB California state director. “Our fear and our unfortunate prediction are that a number of scheming plaintiff's attorneys will try and use the same tactics they've used with ADA and prop 65 to shake down small businesses for the myriad COVID-related rules that have been thrown at them at every level.”
Among the initiatives, Gov. Newsom unveiled to assist business owners is to increase from $500 million to $2.1 billion what is earmarked as grants to give to 25,000 small businesses impacted by the pandemic.
“We're very pleased with the additional grant dollars allocated to small businesses that desperately need more money to survive right now,” Kabateck told the Southern California Record. “It gives them the ability to pay bills, hopefully, get some payrolls taken care of, and keep their lights on for the short term. For some, it will at least bridge the gap between complete closure and survival.”
The plan further allocates $50 million of the $2.1 billion for non-profit cultural institutions.
“There are a number of small businesses, such as restaurants, gift stores, and retailers, that are for-profit that benefit in those communities of the nonprofit institutions and so, at the end of the day, there is a ripple effect for many businesses that thrive and subsist within those communities where there are these cultural centers,” Kabateck said.
Some 600,000 barbers and hairstylists licensed through the Department of Consumer Affairs as well as restaurants and bars licensed through the state’s Department of Alcoholic Beverage Control can expect fee relief for two years ranging from $455 to $1,235 annually.
“We would like to see expansion to all small businesses that are facing such horrendous fees and assessments,” Kabateck said.
Proposals for relief that have not yet been approved include allowing deductions of up to $150,000 in expenses covered by Paycheck Protection Program loans.
“My understanding is there are different stakeholders who are trying to determine what is the most sensible level of deductions,” Kabateck said. “You've got a lot of different stakeholders looking at different levels based on what they identify as a fair deduction. It's a lot of the horse-trading that we see during regular budget season, which is different groups trying to get their hands on as much of the pie as they can.”
If it is approved, all businesses that took out PPP loans of $150,000 or less would be eligible to maximize deductions for state purposes and would extend to Economic Injury Disaster Loans, according to a statement online.