Package includes $600 for low-income residents, $2.1 billion for small businesses
More relief is on the way, and this time, it’s from the state.
Gov. Gavin Newsom announced Wednesday that he, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon reached an agreement on a $9.6 billion economic recovery package that will provide immediate relief to California residents.
This relief includes $600 one-time stimulus checks for low-income residents and more than $2 billion in grants for up to $25,000 for small businesses impacted by the pandemic.
The agreement provides the “Golden State stimulus” checks of $600 to households receiving the California earned income tax credit for 2020, specifically those with incomes below $30,000. Households with individual tax identification numbers who were excluded from receiving the $1,200 stimulus from the federal government issued last spring and whose income is below $75,000 will also receive $600 checks.
ITIN taxpayers who qualify for the California EITC would receive a total of $1,200 shortly after they file their 2020 tax returns.
There will also be $600 grants given to households enrolled in the CalWORKS program and recipients of SSI/SSP and Cash Assistance Program for immigrants.
Combined, a total of $5.7 million payments will be given to low-income Californians. The Golden State stimulus checks will be expedited for legislative approval next week.
“Santa Barbara residents and businesses impacted by the stay-at-home orders and business restrictions are in need of help,” Santa Barbara Mayor Cathy Murillo told the News-Press. “The state is prioritizing assistance to low-income residents and a number of business types, such as child care providers and personal care licensed professions. However, if the restrictions on business activities continue, we are worried that this state assistance will be insufficient to account for the significant loss of revenues and wages that many businesses and workers have experienced.”
She added that the city has also experienced significant reductions in revenues.
“We have provided rental assistance to residents and funding for small business grants, but I know it’s not enough,” the mayor said.
Along with grants for up to $25,000 for small businesses, $50 million would be allocated for cultural institutions.
Other highlights of the package include: two years of fee relief for roughly 59,000 restaurants and bars licensed through the state’s Department of Alcoholic Beverage Control; more than $400 million that will provide stipends of $525 per enrolled child for all state-subsidized child care and preschool providers; $24 million for Housing for the Harvest; $35 million for food banks and diapers; $100 million in emergency financial aid for qualifying low-income students; and $6 million for CalFresh student outreach and application assistance, among others.
“We did have some significant closures and re-closures of businesses, and given that it’s not clear whether we did the right thing to begin with, I think it’s a responsible thing to do to help out these businesses and families. There’s no doubt about it,” said Dr. Peter Rupert, an economics professor at UCSB and the director of the Economic Forecast Project. “It’s massively increased from the $500 million to $2 billion. That’s quite amazing, so I think we’re targeting the right people.”
He told the News-Press that his main concern with the small business grants is that the previous grants focused on gross revenue without taking into account cost increases from building parklets, buying heaters and potentially hiring additional staff to sanitize regularly.
“I think that’s what has to be looked at there. We have to factor in these costs as well,” Dr. Rupert said.
All in all, though, the professor said he thinks the package is hitting all the right things, although he did point out that California’s economy is almost up to $3 trillion.
“So, $2 billion out of that? That’s a small number, right?” he said. “Obviously, everybody wishes it were more.
“We have a lot of low-income individuals and many retail businesses and restaurants. We have a large share in that sector, so this is going to be a big help for some of them,” he said. “I think $500 million was too little given the second closures. I think this one is certainly a step in the right direction. Will more be needed later? I hope not.”
Kristen Miller, president and CEO of the Santa Barbara South Coast Chamber of Commerce, told the News-Press that the chamber supports all economic relief during this time, but businesses are continuing to suffer.
“Even if they are open with limited capacity, ongoing operational costs create such a challenge for businesses,” she said. “The economic relief is helpful, yet we continue to urge government officials to support a broader reopening, following safe guidelines outlined in our Roadmap to Recovery.”
Ms. Miller said it’s hard to tell if the package is “anywhere near enough.”
“Grants and loans are small and temporary, and for most businesses, this support cannot replace a steady flow of customers,” she said.
The CEO added that the chamber has heard from several local business members that, despite promptly applying for state grants, they’ve been unsuccessful.
“We understand that California has a lot of businesses in need of funding, yet grant availability does not currently seem to be fulfilling these needs. We hope the increase to $2-plus billion will help businesses on the South Coast receive the support they desperately need,” Ms. Miller said. “The most important thing for businesses at this time is that they can continue to keep their doors open and operate safely.”