LA businesses: Here's what you need to know about Gov. Newsom’s budget proposal

Immediate financial relief topped Governor Gavin Newsom's wishlist in an ambitious $227 billion spending plan he released Friday for the upcoming fiscal year.

"Our budget, understandably, represents and reflects the realities of this recession, particularly as it relates to the realities affecting low-wage workers, small businesses, as well decades-long inequalities,” Newsom said during his budget briefing.

Newsom is asking the state legislature to approve $4.5 billion for stimulus checks, tax breaks and grants, relief he said should be distributed by the end of this month.

Here’s what this means for Southern California business owners and workers:

GOLDEN STATE STIMULUS

This is a $2.4 billion stimulus proposal. If approved, California residents who are eligible for the state's Earned Income Tax Credit in 2019 will receive a one-time $600 check. This covers nearly 4 million people and generally extends to workers who earn less than $30,000 per year. Additionally, taxpayers who file with an Individual Taxpayer Identification Number (ITIN) are also eligible, including undocumented immigrants.

SMALL BUSINESSES GRANTS

This is a $575 million grant proposal. If approved, small businesses, nonprofits and cultural centers could be awarded grants of up to $25,000. Priority will be given to industries and regions affected the most by the pandemic (e.g., bars, restaurants, etc.). Disadvantaged communities and underserved small business groups will also be favored.

The $575 million pledge from the governor would support the already up-and-running California Small Business COVID-19 Relief Grant Program. Business owners can apply here. The deadline for the first round of grants is January 13, but would be extended if this additional money is approved.

TAX INCENTIVES

Newsom has proposed $777.5 million for a California Jobs Initiative. This includes $430 million earmarked specifically to keep businesses in California and hire California workers. There is also an additional $100 million to extend the Main Street Small Business Tax Credit, which gives tax breaks to businesses when hiring new employees and rehiring former ones.

FEE WAIVERS

Newsom has also proposed a $70.6 million fee waiver initiative. This would waive fees normally paid to state and local governments by barbers, cosmetologists, manicurists, bars and restaurants, etc., industries acutely affected by the pandemic.

WHEN WILL THIS ALL HAPPEN?

As with all budget proposals, the California state legislature must weigh in. Generally, budgets are revised in May and approved in the summer, but Newsom is hoping the state assembly and senate will expedite his relief proposals.

Have story tips or ideas about business in Southern California? Email me at benjamin.gottlieb@kcrw.org