California Gov. Gavin Newsom and state legislators reached a massive economic relief package yesterday that has big implications for small businesses (including restaurants) and workers. The state’s proposed $9.6-billion COVID-19 relief plan is a combination of actions and funds designed to assist low income residents, as well as restaurants and bars, and undocumented workers experiencing hardship during the coronavirus pandemic. The package applies only to California, and would be additive to anything done at the federal level.
This aid package is a compromise between Newsom’s proposed Golden State Stimulus state budget, along with state senator Toni G. Atkins, and assembly speaker Anthony Rendon, and is meant to specifically target California’s most vulnerable populations and businesses who have continued to struggle since the coronavirus pandemic began nearly one year ago. The relief package still requires approval by the California legislature.
There’s a lot to unpack, so let’s jump in.
$2.1 billion for businesses for restaurants and bars
According to Newsom, California has financially helped 21,000 businesses since December. The new agreement increased the initial funds from $500 million to more than $2 billion, and if passed would arrive in the form of grants up to $25,000 for restaurants or small businesses impacted by COVID-19.
In 2020, countless LA restaurants, bars, clubs, cafes, and bars applied for aid from the federal Paycheck Protection Program or Economic Injury Disaster Loans. Under the California stimulus, business that borrowed $150,000 or less could deduct this amount in expenses at tax time.
License fee waivers
This proposal offers two years of fee relief for any business that has a license through the California’s Department of Alcoholic Beverage Control. These fees can range anywhere from $455 to $1,235.
Last April, Newsom announced a $125 million plan to provide disaster relief funds to the state’s many undocumented immigrants, who make up roughly 10 percent of the state’s entire workforce. The new stimulus is the second wave of assistance for restaurant workers who have not received any unemployment benefits or federal stimulus funds.
The stimulus agreement proposes a $1,200 payment to taxpayers without Social Security numbers, and who were excluded from receiving aid in 2020; many undocumented workers use Individual Tax Identification Numbers (ITINs) instead of SSNs for employment. The stimulus payment would only arrive after a 2020 tax return is filed.
Californians with incomes under $30,000 per year
The plan would also cut $600 checks to 5.7 million state occupants who earn less than $30,000 per year, or who qualify for the Earned Income Tax Credit. Once again, those hoping for the payment would be required to file a 2020 return before receiving payment.
Housing For The Harvest is a coronavirus program that currently offers temporary hotel housing to agricultural workers who must to isolate due to COVID-19. The relief package would contribute an additional $24 million in financial assistance and services to this state-run program.
As California legislators determine whether this aid package is passable, the United States Congress is still working out President Joe Biden’s $1.9 trillion stimulus package that would bring more aid to American households.