Immediate Action Agreement for COVID Relief
Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon announced yesterday a $9.6 billion early budget package that will expedite relief to individuals, families and businesses suffering economic hardship from the COVID-19 Recession. This relief package, which will be voted on next week, echoes key themes of the Biden-Harris American Rescue Plan.
“People are hungry and hurting, and businesses our communities have loved for decades are at risk of closing their doors. We are at a critical moment, and I’m proud we were able to come together to get Californians some needed relief,” said Senate President pro Tempore Atkins.
Below are key provisions of the agreement:
Support for Individuals and Families
The agreement provides $600 in one-time relief to households receiving the California EITC for 2020. In addition, the agreement provides a $600 one-time payment to taxpayers with Individual Tax Identification Numbers (ITINs) who were precluded from receiving the $1,200 per person federal payments issues last spring and the more recent $600 federal payments. The agreement would provide the $600 payments to households with ITINs and income below $75,000. ITIN taxpayers who also qualify for the California EITC would receive a total of $1,200. The payments will be provided to these households shortly after they file their 2020 tax returns.
The agreement broadens this initial plan and now provides direct relief to more lower-income Californians through a $600 one-time grant to households enrolled in the CalWORKS program and recipients of SSI/SSP and Cash Assistance Program for Immigrants (CAPI). Grant payments for CalWORKS households are expected by mid-April; timing for the delivery of SSI/SSP and CAPI grants is currently under discussion with federal officials.
Combined, the agreement represents a total of 5.7 million payments to low-income Californians.
Support for Small Businesses
More small business and nonprofit relief grants:
$2.1 billion in additional funding for the state’s COVID relief small business and non-profit grant program. This builds on the $500 million program started by the Governor and the Legislature in December, for a total of approximately $2.6 billion in funding.
Tax and fee relief focused on small businesses:
$2 billion in tax cuts—focused on small businesses—over the next several years by exempting the first $150,000 of expenses paid by federal Paycheck Protection Program (PPP) and federal Economic Injury Disaster Loan funds. (An estimated 87% of PPP loans were under $150,000.)
$116 million in fee cuts by waiving various fees for two years for heavily impacted service industries.
The agreement reflects a four-fold increase – from $500 million to more than $2 billion – for grants up to $25,000 for small businesses impacted by the pandemic, and also allocates $50 million for cultural institutions.
Other Key Agreements
Cut Restorations: $857 million beginning in 2021-22 to restore selected program cuts in the 2020-21 budget agreement. This is on top of the restorations already proposed to be restored in the Governor’s proposed budget. This includes ongoing restorations of $300 million for the California State University, $300 million for the University of California, and $128 million for the Judiciary.
CalWORKs Eligibility Expansion: $240 million to expand eligibility for CalWORKs by exempting the supplemental federal Unemployment Insurance benefits from income calculations.
Federal Child Care Funds: $400 million in available federal funds to provide stipends of $525 per enrolled child for all state-subsidized childcare and preschool providers serving approximately 400,000 children in subsidized care statewide. The new federal resources will extend care for children of essential workers through June of 2022 and increase access to subsidized childcare for more than 8,000 children of essential workers and at-risk children – who are not currently served in the system – through June of 2022.
Student Assistance: $120 million to accelerate proposed additional aid for community college students, and $16 million for outreach to higher education students on availability of CalFresh benefits.
Food and Diaper Banks: $35 million for immediate support for Food Banks and Diaper Banks.
Housing for the Harvest: $24 million to support the Housing for the Harvest program to provide shelter and aid for farmworkers impacted by COVID-19.