California Governor Gavin Newsom announced a financial relief package for small businesses in the state, including up to $500 million in new COVID-19 Relief Grant funding, during his weekly update on Monday.
In addition to the new grant funding, the governor also announced the state had added an additional $12.5 million added to the California Rebuilding Fund launched last week and tax extensions for small businesses.
During the announcement, Newsom called on Congress to act and provide additional financial relief to states across the county as the COVID-19 pandemic experiences a resurgence in recent weeks and continues to significantly impact state budgets.
“We can’t do this alone, even though we are the fifth largest economy in the world, it’s been 248 days since that CARES Act, and with the PPE money drying up, money across the spectrum drying up, we need Congress to act with urgency.” said Newsom. “Urgency is not January, February, March or April of next year, urgency is today, urgency is tomorrow, urgency is 24-hour effort, seven days a week to figure this out and to get something done and meaningful.”
The tax relief announced includes “an automatic three-month income tax extension for taxpayers filing less than $1 million in sales tax extends the availability of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales and provides expanded interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.”
The Governor’s Task Force on Business and Jobs Recovery estimates that if fully realized, the total tax relief is estimated to have billions in impact.
“California’s small businesses embody the best of the California Dream and we can’t let this pandemic take that away,” Newsom said. “We have to lead with health to reopen our economy safely and sustainably while doing all we can to keep our small businesses afloat. With this financial assistance and tax relief, California is stepping up where the federal government isn’t. By providing potentially billions in immediate relief and support, our small businesses can weather the next month as we continue partnering with the legislature to secure additional funding and investments in small businesses in the new year.”
The additional COVID-19 relief grant funds would be available to businesses, nonprofits and cultural institutions impacted by the COVID-19 restrictions in the form of grants of up to $25,000. Those funds would be expected to begin to be distributed in early 2021.
The governor previously announced the opening of the California Rebuilding Fund which made available $25 million to help impacted small businesses rebuild from the economic crisis and fortify local economies over the next year as businesses pivot and recover.
The additional $12.5 million in funds is expected to allow the fund to be fully capitalized and to raise an additional $125 million for low-interest loans to small businesses with less access to loans from traditional banking institutions, according to the governor’s office.
Despite the new relief efforts, Newsom emphasized that assistance from the federal government is still necessary to weather the impacts of the ongoing economic downturn.
“No more bickering, time for people to put aside their differences,” Newsom said. “Do the right damn thing and don’t do it as Democrats or Republicans but do it as Americans first.”
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