Gov. Newsom calls for more state aid to California small businesses like restaurants

He wants to raise the kitty for direct grants to $4 billion, saying that would be the highest in the nation.
Photograph: Shutterstock

With California enjoying an unexpected budgetary surplus of $76 billion, Gov. Gavin Newsom proposed Thursday that an additional $1.5 billion in financial aid be extended to restaurants and other small businesses that need help in rebounding from the pandemic.

The additional funds would raise the state’s total kitty for small business grants to $4 billion, making it the nation’s largest state-level assistance program for enterprise-scale companies, according to Newsom. He aired his plan after providing $6.2 billion in tax breaks for local businesses, an effort that Newsom’s office termed historic.

More tax concessions are included in the package proposed yesterday by the governor. In addition to $1.5 billion in additional grant money, his program would earmark an additional $147 million to cover tax credits to businesses that maintained their staffs through the economic and health crisis.

Another $895 million in credits would be extended through the State Small Business Credit Initiative.

Direct outlays include $250 million in one-time grants to companies that relocate their headquarters to the state.  

In addition to the increased pool of small-business grant funds, restaurants stand to benefit from the $95 million that Newsom proposed for promoting tourism to the state.

That provision drew praise from the state’s lodging industry.

“California’s hotels and our employees are so ready to be fully reopened and re-welcome guests from near and far,” Lynn Mohrfeld, CEO of the California Hotel and Lodging Association, said in a statement.  “We are grateful for Gov. Newsom’s extraordinary support that will provide much-needed funds to let the world know that California hotels are safe, healthy and open.”

Newsom has had an often fractious relationship with the business community of his state. Restaurants in particular have criticized the Democrat as being too conservative in his plan for reopening the state. Establishments in many counties were limited to 25% of their dining-room capacities through mid-March when a number of other states had completely lifted restrictions on restaurants or raised capacity limits to several times the level permitted in California.

Newsom, who is facing a recall vote in the state’s next election, surprised many when he announced in early April that most COVID-related restrictions on restaurants and other businesses within the state would likely be lifted on June 15. He has since added that mask requirements will likely be dropped at that time.

California has more restaurants than any other state in the nation. It estimates that it’s home to 4.1 million small businesses in total.

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