Gov. Newsom plans $4B for California’s economic recovery

SACRAMENTO — After spending most of 2020 telling small businesses to close and limit their customers, California Gov. Gavin Newsom on Tuesday proposed $4 billion worth of state spending he says will help them survive in 2021.

Newsom was the first U.S. governor to impose a statewide stay-at-home order because of the coronavirus pandemic in March, earning praise at the time for decisive action to contain the spread.

But a recent surge of cases has caused those restrictions to linger into 2021, shuttering bars, restaurants, barber shops, gyms and movie theaters for months at a time while imposing strict limits on capacity inside retail stores during the year’s busiest shopping season.

Those restrictions have had an uneven impact on the world’s fifth largest economy. While people with higher incomes kept their jobs by working from home, people with lower incomes — including retail and restaurant workers — either lost their employment or were put on unpaid furlough as small business owners struggled to stay afloat during the pandemic.

Mounting frustration over Newsom’s orders — even as virus cases overwhelm hospitals — has fueled a recall effort. Newsom is set to release his new budget proposal on Friday. But Tuesday, he offered a preview by revealing more than $4 billion worth of state spending aimed at creating jobs and helping small businesses.

Close to half of that money — $1.5 billion — would help people purchase electric cars and create construction jobs by paying for the charging stations necessary for drivers to use them. The proposal is linked to Newsom’s plan to ban the sale of all new gas-powered cars in California by 2035.

Small businesses would get $575 million. The money would pay for grants of up to $25,000 each to small business owners. That money includes $25 million for small museums and art galleries that have been forced to close during the pandemic. Newsom and the state Legislature have already given $500 million to this program, so this new proposal — if approved — would make more than $1 billion available to small business owners.

Some businesses could also get a tax break if they hire more workers. Last year, Newsom signed a law that promised certain business owners a $1,000 credit on their state tax bill for the net increase of each new worker hired by Dec. 1. The governor’s office says more than 9,000 businesses have reserved $54 million of those credits so far. Newsom’s proposal would spend $100 million to extend that program.

The plan would also waive $70.6 million in various fees imposed on businesses most impacted by the pandemic.