Last Friday, Governor Gavin Newsom released a revised version of his 2023-24 state budget. While there are some proposed increases to several small business programs, the proposed cuts to other critical programs could result in severe harm to the state’s small and micro businesses.
Lawmakers have until June 15, 2023 to agree to a final budget.
The good news
Small Agricultural Business Relief Grants – An increase of $25 million one-time General Fund to expand the scope of the current California Small Agricultural Business Drought Relief Grant Program to provide direct assistance to eligible agriculture-related businesses that have been affected by recent storms. Expanding the program’s reach and continuing to support the ability of agricultural businesses to remain open and add or restore jobs. This proposal also aims to advance support for workers of impacted businesses.
Technical Assistance to Small Businesses – An increase of $23.5 million Federal Funds, to be spent over 5 years, for the Office of the Small Business Advocate to provide technical assistance to small businesses, including businesses owned by socially- and economically-disadvantaged individuals applying for State Small Business Credit Initiative capital programs.
The $50 million for the California Investment and Innovation Program, administered by the California Pollution Control Financing Authority that will provide funding for CDFIs remains intact.
The bad news
California Small Business COVID-19 Relief Grant Program – A decrease of an additional $50 million one-time General Fund from this program due to declining General Fund revenues, bringing the total reduction to $142 million. Since Governor’s Budget, the Office of the Small Business Advocate has continued to award grants to eligible businesses and estimates there will be an additional amount remaining after all grants have been awarded.
- $190 million reduction in funding for California Infrastructure and Economic Development Bank (IBank);
- $15 million reduction in funding for the California Department of Financial Protection and Innovation (DFPI).