2021 what a year! The state of California invested billions in small businesses during the COVID-19 pandemic at levels the state has never done before. As Governor Newsom announced on Monday at his press conference on his proposed 2022-23 California state budget, the state is continuing its small business assistance by continuing existing programs at similar or increased levels as well as introducing a few new budget items.
Particularly of interest to many of our members is that the Governor mentioned “permanent support” for the Small Business Technical Assistance Expansion Program (SB-TAEP) with an increase in funding. For those who don’t know, the TAEP program supports the ecosystem of business service providers, most of them CAMEO members. These organizations provide low-to no-cost services to California’s businesses. This would cap a 10-year effort by CAMEO and its colleagues to solidify state support for the ecosystem. The Budget includes for the SB-TAEP program:
- $6 million General Fund in 2022-23 to bolster SB-TAEP to handle increased demand,
- $23 million ongoing General Fund to permanently support the Program; and
- $3 million ongoing General Fund beginning in 2023-24 to support the continuation of the Capital Infusion Program, which supports business consulting provided by the SBDC Network to assist small businesses to access capital.
Governor Newsom announced $3 billion to start paying off the unemployment insurance debt. This is important for small businesses, because without this payment there will be an automatic tax on small businesses to pay the state’s unemployment insurance debt from the federal government.
Notable investments that Governor Newsom has proposed include:
- relief for restaurants and venues at a proposed $500 million
- increased funding of $1 billion (up from $220 million) for iBank’s small business loan guarantee program
- continued funding for the Small Business COVID-19 Grant Program at a proposed $150 million (although Governor Newsom mentioned this number may expand depending on numbers from May revise and negotiations with legislators)
- expansion of the Venture Capital Program for underrepresented entrepreneurs at $200 million
- waive filing fees for new businesses at $40 million
- improve career pathways and career training programs to ensure that businesses have well trained employees at $1.5 billion
- improve supply chain issues with a proposed $2.3 billion for port freight, goods movement, and infrastructure.
Last year, CAMEO and our colleagues supported AB 915, a bill that would require state agency directors to establish a minimum goal of 25% procurement participation for small businesses, including microbusinesses and require they have a small business liaison that will develop an “economic equity first” action plan. In Governor Newsom’s budget he acknowledged the importance of using small businesses for state procurement and said that 90% of the state’s contracts, nearly $100 billion, use local businesses in California. See his statement under “State Procurement Initiatives”.
We’re still waiting for the details and release of the full budget and will update this blog post when it’s released. You can see an interactive version of Governor Newsom’s proposed budget here. You can see the video of his budget press conference here.
Read a comprehensive summary prepared by the Assembly Committee on the Budget.