On Tuesday, Governor Gavin Newsom revealed a $4 billion spending proposal aimed at job growth, small business protections, and the build up for electric car systems in California.
Almost half of the proposed spending, $1.5 billion, would go to electric vehicles. According to those close to the Governor’s office, the funding proposal, called the Equitable Recovery for California’s Business & Jobs plan, would help make electric cars easier to buy for Californians looking to make a switch and would create many charging station construction and maintenance jobs in the state in the coming decades.
$575 million would go directly to small businesses, assigning grants of up to $25,000 for small business owners. $25 million of the program has already been earmarked for museum and art gallery grants. The grant program would act as an extension of a program that was funded last year for $500 million. The program, which has recently come under fire for having data breaches, would in total give over $1 billion during the pandemic.
Tax breaks would also constitute a large part of the proposal, with over $500 million going to various programs. An extension of the current tax break program for small businesses where a $1,000 credit for the net increase of each new worker hired would be extended into 2021, with $100 million going to fund it. $430 million of the tax credits would go directly to businesses in California to stay within the state and to boost hiring.
Various other program would receive funding as well. Over $70 million would go to waiving fees on small businesses due to the pandemic, such as PPE readiness and meeting state public health requirements. $50 million would go to small business loans, with an additional $100 million going to tax exemptions of manufacturing equipment purchasing.
CA’s economy is known for our innovation & resilience.
Our proposed $4.5B Equitable Recovery for CA’s Business & Jobs plan reflects our commitment to a broad-based recovery, ensuring CA remains the best place to start & grow a business. #CaliforniaForAll https://t.co/yIsWBic9Na
— Office of the Governor of California (@CAgovernor) January 5, 2021
“California’s economy is known the world over for our innovation, inclusion and resilience. That spirit will carry us through this pandemic and beyond,” explained the Governor in a press release. . “These budget proposals reflect our commitment to an equitable, broad-based recovery that ensures California remains the best place to start and grow a business — and where all Californians have an opportunity to reach their dreams.”
Many of the proposals have already been supported by lawmakers. While most of the proposals would not go into effect until July, Governor Newsom asked both the Assembly and Senate to pass the small business grants part soon as they are of most need. Both Assembly Speaker Anthony Rendon (D-Lakewood) and Senate President Pro Tempore Toni Atkins (D-San Diego) expressed that they would be willing to work with him on that.
Many lawmakers, spending watchdogs critical over spending proposal
However, many lawmakers were also critical of the proposal on Tuesday, noting that nearly half of the funding would go to electric cars, that small businesses wouldn’t need the help if they were allowed to stay open, and that the Governor was only trying to fix his mistakes in the spending proposal.
“What would help a lot more is if the governor stopped arbitrarily shutting them down and harassing them,” said Assemblyman Kevin Kiley (R-Rocklin). “Small businesses are not asking for the governor’s help. They are asking him to get out of their way.”
Others remained critical that Newsom was only trying to deflecting from a mounting recall campaign against him.
“Look at what he plans to spend everything on,” explained former accountant and state spending watchdog Charles Martin Jr. to the Globe. “It’s all either personal projects or solving things he broke. Like, look at all the money going to California businesses to stay and create jobs. While Newsom really didn’t start that fire, per se, a lot of the companies leaving and people leaving have been on his watch. It has definitely exploded since he was sworn in two years ago.
“Same goes for the credits on machinery. That’s encouraging manufacturing growth, an industry on the decline in California for decades, but also bleeding out even more during Newsom’s term.
“The small business loans and grants are only helping solve the problem he created by shutting them down in the first place and then doing nothing about it for months. That was literally a problem created by him in the hopes of a COVID containment, which didn’t exactly work either. I mean, we just lost a few hundred today in LA alone.
“And there’s his pet projects like electric cars. This is the largest chunk of funding. You can argue job growth on this, but this does nothing directly for small businesses and other industries that are on the brink of death. He’s funding this now so that it would be harder to rescind in the future. He wants to phase out gas cars, and he’s literally using worry over a deadly pandemic as a way to fund it. I don’t care if you are GOP or a Dem. That’s just despicable. People are dying, businesses are dying, people are moving away. And he thinks electric cars deserve the most now. We all know that it’s an important issue, but he is just tone deaf on priorities right now. He just cares about that legacy.
“All of this also points to trying to get people off of his back about that recall going out against him. It’s obvious he’s trying to win favors now so he nips it in the bud by showing how he is spending and helping small businesses.”
More details on the $4 billion proposal are to be released on Friday when Governor Newsom formally submits his proposal to the state legislature.
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