Los Angeles, CA

New COVID relief could include business grants, child savings accounts, and more for Californians

Josue Torres
Photo by Nicolas J Leclercq.Unsplash

The California Legislature is considering a slew of fresh financial aid measures for citizens who have faced economic hardship as a result of the COVID-19 outbreak, including rent assistance, state stimulus checks, and grants for small companies and entrepreneurs looking to launch new initiatives.

Gov. Gavin Newsom released more than a dozen initiatives this month as part of his California Comeback Plan, which he wants to fund with a piece of a record tax revenue windfall as well as more than $25 billion in federal aid authorized by Congress.

“This is a jumpstart for our local economies, and it’s how we’ll bring California roaring back,” Newsom said in presenting the new ideas.

On Wednesday, lawmakers started conducting public hearings on new budget plans.

The new budget expands on earlier assistance authorized in February, which provided partial rent relief in addition to state stimulus cheques of $600, mostly for those earning $30,000 or less.

Stimulus packages and other direct payments

The state would issue $600 stimulus cheques in the form of tax refunds to Californians earning up to $75,000 a year under the new idea. 

Qualified families with dependents, including those in the United States without legal immigration status, will be eligible for an extra $500. The idea would increase the tax refund program by $8.1 billion to almost $12 billion, benefiting almost two-thirds of California residents.

Furthermore, additional grants totaling $1 billion would be offered to people who lost their employment as a result of the epidemic so that they might return to school or establish their own enterprises.

Locations and counties would receive a total of $35 million over five years to assist with the establishment of universal basic income pilot programs in which low-income households would get a monthly check — $500 to $1,000 in certain cities — with no restrictions on how the money is spent. Local governments would be required to match state contributions. Proponents of guaranteed income schemes, such as those suggested in Los Angeles and Oakland, argue that they assist disadvantaged individuals in overcoming adversity.

Housing and utility assistance

Newsom has suggested increasing the state’s rent assistance program to cover all past rent collected during the epidemic, as well as certain months of future rent for low-income renters, as long as funds are available. 

The state has begun paying back rent in exchange for landlords agreeing to waive part of the money due.

In addition, the governor’s budget proposes allocating $2 billion to settle past-due water, power, and gas utility bills for low-income families.

Assistance with business

Legislators are also contemplating extending a previously authorized competitive program that provides similar help to include state subsidies of up to $25,000 for thousands of more small enterprises. 

The idea would offer another $1.5 billion in direct subsidies to California’s small companies, for a total of $4 billion.

In addition, according to the budget, a new California Dream Fund would use $35 million to provide micro-grants of up to $10,000 to “seed entrepreneurship and small business creation in underserved small business groups that are facing opportunity gaps,” such as immigrants and Californians who speak limited English.

A $250 million grant program for firms that locate or migrate to California, or remain, expand, and generate full-time employment in the state, will be created.

Newsom’s budget includes $50 million for the state’s I-Bank Small Business Loan Guarantee Program, which will continue to offer loans while firms recover from the economic effects of COVID-19.

The state would also improve the State Small Company Credit Initiative, which was established in 2010 to bolster state initiatives that promote small business funding. The federal government is expected to pay California $895 million for the program.

Financial assistance for students

Photo by javier trueba.Unsplash

The governor recommends spending $2 billion to establish a California Child Savings Accounts program for 3.8 million low-income youngsters. Each kid would get $500 in a college savings account that would increase over time.

Newsom also wants to spend $4 billion over the next two years to build additional student housing, which would help down the cost of attending college.

In addition, the budget would establish a $1 billion program administered by the California Student Aid Commission for the state’s public schools and universities to offer scholarships to individuals who have lost their employment in order for them to gain new skills and join the labor market.

In addition, $7 billion is proposed in the budget to expand internet infrastructure and improve access for Californians.

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