Gov. Gavin Newsom expanded the state’s COVID-19 Small Business Relief Grant program to a total of $4 billion last week, which is in addition to a $6.2 billion tax cut for business owners struggling to recover from the pandemic.
“We certainly would like to see considerable more money dedicated to our number one job creators but these are steps in the right direction,” said John Kabateck, California state director for the National Federation of Independent Business (NFIB).
Some 198,000 small businesses and nonprofits either have been or will be awarded grants, which includes awards for 43,874 small businesses and nonprofits for a total of $475 million, according to a press release.
“We're quite satisfied with it,” Kabateck told the Southern California Record. “We're just working to ensure that billions more dollars sitting in our state bank account are not spent on the wrong priorities and do, in fact, get out to those who need it the most, which is mom and pop businesses.”
Initiatives that are receiving an infusion of cash include the following programs.
- $895 million is earmarked for the State Small Business Credit Initiative (SSBCI) to strengthen state programs, which support the financing of small businesses. “It’s a good and helpful step for local and state program heads who are yearning to get money out into the hands of small businesses to help them get back on their feet,” Kabateck said. “I think the money is going to be dedicated to giving loans and grants at the local level where business owners need it.”
- The CalCompetes tax credit program will be increased to $360 million and a one-time $250 million grant program will be created to incentivize businesses to relocate to California. “The governor and our policymakers also need to make sure that five steps forward are not met with 20 steps backward in the form of higher taxes, more regulations, government overreach, and the threat of lawsuits,” Kabateck said.
- Approximately $250 million will be invested in California’s ports to address revenue loss and bolster future economic activity. “We'd like to see more dollars directly go to Main Street businesses,” Kabateck said. “There is some hope and promise in bringing products and commodities into California if those from outside our borders can do so in a more efficient and economical way, and we can get more speed to market but let's first help get small businesses within the state out of the hole.”
- Sales tax exclusions will be expanded through the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) with a $200 million infusion to promote, grow and incentivize green manufacturing in California. “It makes sense to have policy that creates clean, safe, and green communities but our policymakers need to remember that there are millions more business owners and entrepreneurs out there who are beyond the spectrum of green energy and clean energy who need money,” Kabateck said.
- Small businesses that have hired and retained workers since the second quarter of 2020 can count on $147 million being invested in the Main Street Small Business Tax Credit program. “With our unemployment payouts that are still incentivizing many workers to sit on their couch instead of getting back into the workplace, these kinds of dollars are very helpful in incentivizing employer and employee alike to get things back to normal,” Kabateck.
- Some $95 million will be allocated to jumpstart California’s tourism industry. “There is a symbiotic relationship,” Kabateck added. “When a Disneyland or Magic Mountain benefits and is able to rebound so are the purveyors of small businesses in the surrounding community. We're also hopeful that those dollars dedicated to tourism are not solely focused on the large amusement parks or big-league players but will also include the many small businesses that make up California's tourism industry.”