Newsom government calls for more state aid for small California businesses like restaurants
With California boasting an unexpected $ 76 billion budget surplus, Gov. Gavin Newsom on Thursday proposed that additional $ 1.5 billion in financial assistance be given to restaurants and other small businesses that need help to recover from the pandemic.
The additional funds would bring the total state fund for small business grants to $ 4 billion, making it the largest state-level assistance program for large-scale businesses, according to Newsom. He released his plan after giving $ 6.2 billion in tax breaks to local businesses, an effort the Newsom office called historic.
Other tax advantages are included in the package proposed yesterday by the governor. In addition to $ 1.5 billion in additional grants, his program would allocate an additional $ 147 million to cover tax credits for businesses that have retained their workforce during the economic and health crisis.
An additional $ 895 million in appropriations would be granted through the State Small Business Credit Initiative.
Direct spending includes $ 250 million in one-time grants to companies that relocate their headquarters to the state.
In addition to increasing the small business grant pool, restaurants are expected to benefit from Newsom’s $ 95 million to promote tourism to the state.
This provision has been praised by the state’s hospitality industry.
“California hotels and our employees are poised to fully reopen and welcome back guests from near and far,” said Lynn Mohrfeld, CEO of the California Hotel and Lodging Association, in a statement. “We are grateful for the extraordinary support of the Newsom government which will provide the funds needed to let the world know that California hotels are safe, healthy and open.”
Newsom has had an often difficult relationship with the business community in his state. Restaurants in particular have criticized the Democrat for being too conservative in his plan to reopen the state. Properties in many counties were limited to 25% of their dining room capacity until mid-March, when a number of other states completely lifted restaurant restrictions or raised capacity limits to several times the level allowed in California.
Newsom, who faces a recall vote in the state’s next election, surprised many when he announced in early April that most of the COVID-related restrictions on restaurants and other businesses within the State would likely be lifted on June 15. He has since added this mask and the requirements will likely be dropped at that time.
California has more restaurants than any other state in the country. It estimates that it is home to 4.1 million small businesses in total.