Last week, Governor Newsom unveiled the May Revision of his 2020-21 budget. The new budget adjusts spending priorities to combat the COVID-19 public health crisis and navigate the current economic fallout.
Before the changes proposed in the May Revision, California faced a budget deficit of $54 billion. To close this gap, the measures taken in the revised budget include canceling program expansions and spending increases, as well as withdrawing from the state’s Rainy Day Fund.
We enthusiastically support Governor Newsom’s revised budget for FY 2020-21, which clearly recognizes the importance of small businesses to the California economy. Smallest businesses are the canaries in the coal mine when it comes to the economy. Almost three-quarters (73%) of small businesses have experiences a severe-to-moderate negative impact by the COVID-19 pandemic, that’s according to a survey by Small Business Majority. They also found that a third of businesses have closed. The trends in California are no different.
The governor drew the same conclusion that we have: the best way to get California’s economy back on its feet is for small businesses to bring their employees to back to work, create more jobs and bring resiliency to our communities. If the state and country are going to weather this crisis to the best of our ability, that means investing in small businesses so they can pull us through. Below is a summary of small business-related provisions in the budget’s May Revision.
- Fully funds small business assistance centers to help small businesses through the recovery and help new businesses starts;
- Invests $758,000 in the Governor’s Office of Business and Economic Development’s General Fund for four positions to expand services to underserved small businesses in Inland and Northern California.
- Invests another $50 million for the IBank’s state loan guarantee program for a total of $100 million that will be leverage private lending capital;
- Waives the $800 minimum franchise tax which will help business owners with start up costs;
- Retains the $10 million one-time General Fund for the establishment of the Entrepreneurship Pathways Grant Program; and
- Revamps the Department of Business Oversight to the Department of Financial Protection and Innovation with a $10.2 million Financial Protection Fund. The revamp is aimed at providing consumers and small businesses greater protection from predatory practices while ensuring a level playing field for all companies operating responsibly in California.
Download CAMEO’s letter of support for the Assembly, put it on your letterhead, and submit to JEDE@asm.ca.gov.
Download CAMEO’s letter of support for the Senate, put it on your letterhead, and submit to: