California Governor Gavin Newsom signed a $ 7.6 billion contract coronavirus relief package on Tuesday that will give at least $ 600 in one-off payments to 5.7 million people, reserving more than $ 2 billion in subsidies for struggling small businesses.
Newsom signed the law while Congress was debating a much larger stimulus package for the country, a proposal that could also put money in the pocket of most Americans. And that happens when the first-term governor faces a recall effort fueled in part by widespread anger over how he handled the coronavirus, particularly its impact on companies.
“The backbone of our economy is small businesses. We recognize the stress, the pressure that so many small businesses are under,” said Newsom at a bill signing ceremony at Solomon’s Deli in Sacramento. “And we also recognize our responsibility to do more and better to help support these small businesses at this very difficult and difficult time.”
Newsom’s administration still prohibits indoor dining in most of the state, while limiting the number of people who can enter retail stores at the same time. Newsom said on Tuesday that the state will ease these restrictions in five counties, with more to come in the coming weeks, as the number of new infections has dropped in the past few weeks, along with coronavirus-related hospitalizations.
Newsom used its emergency powers in November to set aside $ 500 million for grants to small businesses. In the first round of financing, the program received more than 334,000 applications, totaling more than $ 4.4 billion in applications.
The law that Newsom signed on Thursday puts another $ 2 billion in that program. Companies with annual revenues between $ 1,000 and $ 2.5 million are eligible for cash, with priority for businesses owned by women and minorities and businesses in areas with high unemployment rates.
The Legislature is likely to approve more aid for businesses next week. Lawmakers planned to pass a bill on Monday that would allow companies to deduct up to $ 150,000 in expenses covered by federal loans from their state taxes – a $ 2 billion benefit in six years. But they decided to change the bill to allow companies to deduct more than $ 150,000 from their taxes, raising the state’s price to about $ 2.3 billion, Newsom said.
Once the law is passed, the state’s total stimulus package will reach just under $ 10 billion.
“This is great even by California standards,” said Newsom.
The package includes $ 3.7 billion to pay at least $ 600 in one-off payments to about 5.7 million people. Most of these people will get the money by claiming California income tax credit on their tax returns. In general, they are people who earn $ 30,000 a year or less.
The money will also go to people who earn less than $ 75,000 a year and use an individual taxpayer identification number to declare their income tax. These are people who do not have social security numbers, including immigrants who did not qualify for federal stimulus payments approved by Congress last year.