New Aid To Small Business And Displaced Workers Due To COVID-19
Sonora, CA — Governor Gavin Newsom in his Thursday live address reported on new help for small businesses and workers as the COVID-19 outbreak has forced people to stay home and many shops to close.
Noting that those filing for unemployment in the state has skyrocketed with more than 1.9 million Californians filing for unemployment benefits since March 12, Newsom disclosed, “We’ve averaged 111,000 unemployment insurance claims on a daily basis over just the last seven days. The economic consequences are profound.” He detailed that has overwhelmed the Employment Development Department’s call center and noted that 200 additional staff have been added to deal with filings.
To address that issue the governor announced a new sale tax receipt loan for small businesses. He explained, “It is a one-year reprieve for small businesses. Where no fines or penalties would be attached. Where they can take upwards of $50,000 as a loan and not have to pay the state those sales tax receipts.”
The proposal could have a significant impact on Californias more than $200 billion budget. Most of the state’s revenue comes from sales and income taxes. Already the income tax deadline has been delayed by three months to July 15. It remains uncertain whether this move will require approval from the state Legislature that is on recess through at least April 13th.
Another loan/grant program the governor touted comes from the recent federal stimulus packages. Beginning tomorrow, California small businesses impacted by the COVID-19 crisis can apply for a loan from the federal government for up to $10 million. It is a first-come, first-serve program, so the Governor encouraged all eligible businesses to contact their lender to learn more.
The state is also allocating $50 million to the California Infrastructure and Economic Development Bank for loan guarantees to small businesses that do not qualify for federal funds, including low wealth and undocumented immigrant communities.
Newsom concluded, “We want to give an overall sense of what we’re [the state] trying to do to highlight those federal supports, advance some state relief through sales tax and then provide some micro-lending opportunities.”
For those looking for work, the state has partnered with three companies – LinkedIn, Salesforce and Bitwise – to launch a website with job listings in California. It is onwardca.org and already has more than 70,000 job listings with most in the health care, agriculture, logistics and grocery industries – essential businesses not affected by the statewide “stay-at-home” order.
Many Governors across the nation are wrestling with what businesses can stay open and which ones can close. In New York, Governor Andrew Cuomo ordered non-essential construction sites to shut down. Officials in the San Francisco Bay area have followed suit. But Newsom instructed he is not planning on changing the state’s guidelines listing construction workers as an essential business exempt from the statewide “stay at home” order.
“The conditions in New York are very different than the conditions in the state of California,” Newsom said. “We’re not naive about magnitude of challenge ahead of us. All of this is subject to change. But currently, I’m satisfied with those state directives.”