SACRAMENTO — Gov. Gavin Newsom and legislative leaders have agreed to a $9.6 billion coronavirus aid package that would provide $600 checks to millions of low-income Californians, as well as grants and tax deductions to businesses struggling through the pandemic.
The plan is even larger than the stimulus spending that Newsom pitched last month as part of his state budget proposal, reflecting a tax base that has rebounded faster than anticipated. Revenue in December and January came in $10.5 billion higher than state officials forecast.
Newsom, Senate President Pro Tem Toni Atkins, D-San Diego, and Assembly Speaker Anthony Rendon, D-Lakewood (Los Angeles County), said Wednesday that they would prioritize getting much of the stimulus money out to Californians this spring. The Legislature could vote on the stimulus package as soon as next week.
“We’re nearly a year into this pandemic, and millions of Californians continue to feel the impact on their wallets and bottom line,” Atkins said in a statement. The agreement will “provide the kind of immediate emergency relief that families and small businesses desperately need right now.”
Under the plan, the state would spend about $3.7 billion to provide direct $600 payments to low-income Californians. Taxpayers who claim the state earned income tax credit for the working poor — generally, those with incomes of $30,000 a year or less — would receive an additional $600 rebate. Noncitizens who pay taxes using an individual taxpayer identification number would be eligible if they made $75,000 or less last year, regardless of their filing status.
Californians enrolled in state welfare and social security programs would receive extra $600 grants in the coming months. Officials estimate the aid would reach more than 5 million households, some of which could receive multiple payments.
An additional $2.1 billion would be set aside to help small businesses adapt their operations for the coronavirus, nearly quadruple the amount of aid that Newsom proposed in his budget last month. The state previously made $500 million available in December to provide businesses with grants of between $5,000 and $25,000 with annual revenue of $2.5 million or less.
This second round of funding would include $50 million dedicated for small cultural institutions that have been unable to operate or are otherwise financially challenged by the pandemic. Those could include museums, art galleries, theater and dance companies, musical groups, zoos and botanical gardens.
Businesses that received Paycheck Protection Program loans from the federal government to keep their workers employed during the pandemic would also be able to deduct up to $150,000 of that money from their state taxes. State officials estimate that will cost about $2 billion.
Bars, restaurants, barbershops, manicure salons and others from the service industry that have been required to close down or limit their capacity during the pandemic would receive about $116 million in fee waivers over the next two years.
In a statement, Rendon said, “We are building an economic foundation for the recovery of jobs, small businesses and, indeed, our everyday lives.”
The plan would reverse more than $850 million in funding cuts that lawmakers made last year as they worked to close a budget deficit estimated at more than $54 billion, including $300 million each for the University of California and California State University and $128 million for the court system. State leaders had originally hoped that a federal bailout would allow them to restore about $11 billion in cuts and deferred spending last fall, but Congress has not yet approved funding.
Other measures in the aid package would expand welfare eligibility by exempting federal unemployment benefits from income calculations, extend subsidized child care for essential workers, provide $100 million in emergency financial assistance to community college students, and give $35 million in support to food and diaper banks.
Newsom proposed a record budget in January that would use a one-time windfall to put nearly $19 billion back into reserve accounts the state tapped into last year and leave a $15.6 billion discretionary surplus. He challenged lawmakers to take immediate action by the end of that month on his economic stimulus plans, including the $600 checks and small business funding, although a spending plan is not usually adopted until June.
Another early priority of Newsom’s, a $2 billion proposal that would give school districts up to $750 per student to reopen for in-person instruction, has been bogged down in disputes over when teachers receive coronavirus vaccinations and other safety measures.
Alexei Koseff is a San Francisco Chronicle staff writer. Email: alexei.koseff@sfchronicle.com Twitter: @akoseff
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February 18, 2021 at 05:34AM
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$600 checks for low-income Californians at heart of stimulus deal between Newsom, lawmakers - San Francisco Chronicle
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