Newsom, Legislative Leaders Strike Agreement on Pandemic Relief Efforts

This week, Governor Gavin Newsom, Senate President pro Tempore Toni Atkins, and Assembly Speaker Anthony Rendon announced an agreement on a package of immediate actions to provide relief to residents, families, and businesses experiencing hardship during the COVID-19 pandemic. The agreement reflects a compromise on initiatives proposed in the Governor’s January Budget to provide cash relief to low-income residents, provide fee waivers for certain businesses, and provide additional support for childcare and other critical activities.

Below, a brief summary of the items included in the immediate action package is provided:

• Golden State Stimulus: Under the agreement, $600 one-time payments will be made to households that received the California Earned Income Tax Credit (EITC) for 2020. Additionally, the agreement will provide $600 one-time payments to taxpayers with Individual Tax Identification Numbers (ITINs) who were precluded from receiving federal economic impact payments. A $600 one-time grant to households enrolled in the CalWORKs Program and recipients of SSI/SSP and Cash Assistance Program for Immigrants (CAPI). Combined, the total agreement represents a total of 5.7 million payments to low-income residents.

• Small Business Relief: The agreement quadruples the amount of small business grants from $500 million to $2 billion, which will provide grants up to $25,000 to small businesses impacted by the pandemic. $50 million is also allocated to support cultural institutions. The agreement additionally conforms California tax law to new federal tax treatment for loans provided through the federal Paycheck Protection Program.

• Business Fee Waivers: The agreement provides two years of fee relief for approximately 59,000 restaurants and bars licensed by the Department of Alcoholic Beverage Control (ABC). Fee relief for nearly 600,000 barbering and cosmetology licensees under the Department of Consumer Affairs will also be provided.

• Childcare Support: $400 million in new federal funds to provide stipends of $525 per enrolled child for all state-subsidized childcare and preschool providers serving approximately 400,000 children statewide will be provided under the agreement. Federal resources will extend care for children of essential workers through June 2022.

• Aid to Individuals and Families: $24 million will be allocated to the Housing for Harvest program to provide financial assistance and services to agricultural workers in the state who have had to quarantine due to COVID-19. A combined $35 million will also be allocated for food banks and diapers.

• Community College Student Support: The agreement provides an additional $100 million in emergency financial aid for qualifying low-income students enrolled in California community colleges. $20 million will also be provided to reengage students who left community college studies during the pandemic or to engage students at-risk of leaving their studies.

• CalFresh Student Outreach: $6 million to support outreach and application assistance to the University of California, California State University, and California Community College students made newly eligible for CalFresh is included in the agreement. $12 million in state funds to support associated county administrative workload will also be included.

• Restoration of Reductions: The agreement also restores previously enacted reductions, effective July 1, for the University of California, California State University, the Judicial Branch, Child Support Services, and for moderate-income housing.

The Senate Budget & Fiscal Review Committee met on Thursday to hear budget measures associated with the above investments. The Assembly Budget Committee is set to convene a hearing on Monday to similarly consider the investments. The Legislature is anticipated to take up the measures for action early next week. An announcement on the agreement reached by the Governor and legislative leaders is available here.