Gov. Newsom Proposes $1.5 Billion More In Small Business Grants

Governor Gavin Newsom announced on Thursday that he will propose another $1.5 billion in small business grant funding to help businesses that were affected by the COVID-19 pandemic shutdown.

His proposed funding would be added to an already existing $2.5 billion program that was born out of the state economic relief package passed in February. The added $1.5 billion would follow the rules, giving grants worth between $5,000 and $25,000 to small business owners whose business had to close or were economically hurt due to Gov. Newsom’s COVID shutdowns during the pandemic. While small business would still need to apply for the grants, they would also not have to pay the money back. However, to be eligible, businesses must have made between $1,000 and $2.5 million in annual pre-pandemic revenue, had to have been operating before June 2019, and must be physically located in California.

Newsom’s proposal would also not cost taxpayers any money, as the funding would come directly from the $27 billion in federal COVID-19 relief that California is due to receive soon.

The Governor proposed the funding due to small businesses in California still needing additional state help in recovering from the pandemic, as well as Newsom combatting against criticisms that he had stymied small businesses during the state lockdowns in 2020 and early 2021 by not allowing many to reopen or, in the case of restaurants and bars, to have customers indoors. In a speech on Thursday, Newsom also noted that the funding would help combat criticism that California is in decline, a notion that had been elevated last month following the Census announcement that California was due to lose a Congressional seat next year.

“People think our best days are behind it. You’re full of it. You have no idea what this state represents, and what it’s going to represent to the rest of the world,” said Newsom on Thursday to the California Chamber of Commerce. “Small businesses intimately understand the pain and stress of the last year — directly understand it — and the struggle now to reopen with all of the dust settling around us.”

Small businesses give rare Newsom proposal approval, others warn of possible hidden reasons behind proposal

Business leaders gave a rare approval to Newsom’s proposal on Thursday, but with many cautioning that additional regulations and paid time off dates shouldn’t be tacked on, as it would largely cancel out the grant payment financially.

“Let’s not forget, it is California’s successful businesses that have provided a once-in-a-generation budget surplus that will allow the state to address some of its most pressing needs,” said California Chamber of Commerce President Allan Zaremberg.

Locally, small businesses echoed both the support of the proposal and the caution of any additional regulations.

“We shouldn’t turn this into another minimum wage hike sort of thing,” noted San Diego small business owner David Rodriguez to the Globe. “It’s great that small businesses get help, it really is, but more regulations can only hurt us at this fragile time. We’ve had to cut back hours for employees due to the minimum wage climbing up each year, pretty much undoing everything that movement has been championing, and we don’t want any more cutbacks on hours because of higher costs. Just let us have our grants and trust us we know what’s best to save our businesses.”

However, some charged Newsom’s proposal as another for him to “buy” his way out of the recall later his year, with the proposal specifically targeting small business owners who had been especially hurt by Newsom’s lockdown policies during the pandemic.

“Gavin Newsom’s job-killing policies devastated small businesses during this pandemic, and now he thinks he can paper over facts with press conferences,” stated California Republican Party Chairwoman Jessica Millan Patterson on Thursday. “Today’s announcement does nothing for the thousands of California businesses that have already shut their doors for good, costing owners their life savings and workers their employment.”

In addition to the $1.5 billion proposal, Newsom also announced other spending proposals on Thursday, including $147 million to give small businesses a $1,000 tax credit for each employee they hire and $360 million in “CalCompetes” tax credits for businesses that relocate to California.

Newsom is expected to announce larger fiscal plans for California later this week.