Californians eligible for a $ 600 stimulus payment can see the money arriving just one month after filing their tax returns under a $ 7.6 billion COVID-19 economic aid package approved by the legislature on Monday of the state.
The pandemic relief plan, drafted last week by Governor Gavin Newsom and legislative leaders, also includes more than $ 2.1 billion in grants and fee waivers for small businesses. Those companies will soon be able to apply for the grants, followed by an approval process that government officials estimate would take 45 days.
The legislature is expected to undertake an additional $ 2 billion in corporate tax breaks this week, bringing the total package to $ 9.6 billion.
The incentive aid for residents who earn $ 30,000 per year or less will come much faster – an average of four to five weeks after they file 2020 tax returns with the National Franchise Tax Office if they also apply for direct deposit, said HD Palmer, a spokesman from the California Department of Finance. The wait could be as long as seven weeks for those who received the $ 600 as a check from the state.
“This is such an important bill because it gives millions of hard-working Californians instant money they so desperately need during this troubled time, during this pandemic,” said Commissioner Phil Ting (D-San Francisco) during the ground before debate Monday the legislature was assumed. half a dozen bills that make up the economic aid package. Newsom said he hoped to sign the measures on Tuesday.
About 5.7 million payments totaling $ 2.3 billion go to low-income Californians under the Golden State Stimulus Program, which aims to help people in the most difficult financial situation, said Senator Nancy Skinner (D-Berkeley).
“Our lower-paid workers have been disproportionately affected,” said Skinner, chairman of the Senate Committee on Budget and Tax Review.
The COVID-19 aid package was made possible by higher-than-expected tax revenues in California, despite the economic setbacks caused by the pandemic.
About 3.8 million of the payments will go to households that were eligible for the 2020 state-earned tax credit, which is available to residents earning less than $ 30,000 per year.
About 565,000 incentive payments go to that with individual tax identification numbers who have not received any federal stimulus payments and whose income is less than $ 75,000, many of whom are illegal in the country. Taxpayers with individual identification numbers who also qualify for the California income tax credit would receive a total of $ 1,200 in state incentive.
The $ 600 incentive payments will also go to 1.2 million people who receive money from federal supplemental collateral income or state supplemental payment programs, and 405,000 payments will be made to participants in CalWORKS, the state’s well-being-to-work program. An additional 15,000 payments are planned for participants in the Cash Assistance Program for Immigrants.
The CalWORKS payments will be placed on EBT cards and distributed to participants in mid-April, although the timing may change based on the ability to automate the process, Palmer said. The timing and method of grant payments for those on SSI and SSP are still being worked out and are dependent on discussions with the federal Social Security Administration, he added.
The $ 600 incentive vouchers for low-income residents could be enough to put food on the table for a household for a month and pay for utilities, said Maeve Elise Brown, executive director of the Housing and Economic Rights advocacy group. Advocates.
“It gives people time to let us out of the pandemic,” said Brown. “This is $ 600, which for some people could be the difference between surviving or not surviving.”
The provision of the aid package that sparked the most debate at legislative hearings was the proposal to implement incentive checks on immigrants illegally residing in the country.
State Senator Jim Nielsen (R-Gerber) wondered if the state budget, as it now flushes, could face problems in the future if the COVID-19-related recession continues.
“This budget will create long-term liabilities for undocumented migrants,” Nielsen said during a legislative debate.
Skinner noted that the incentive to immigrants is increasing is a one-time payment, not a perpetual budget commitment, while Sen. Maria Elena Durazo (D-Los Angeles) said the proposal for immigrants and other low-income residents is important but doesn’t go far enough.
“I think it’s a great step forward. It is a recognition of all these low-paid workers… that they work hard and have been disproportionately hit by unemployment, ”said Durazo. “I think there is scope to include more that are still not under our state or federal government [programs]
Immigrant advocates said many wouldn’t get an incentive check because they don’t have individual taxpayer identification numbers, and noted that immigrants can’t get unemployment benefits or federal incentives either.
“This does not cover all the relief they have been excluded from, and as a result, we are creating inequality,” Sasha Feldstein, manager of the California Immigrant Policy Center, said at a budget hearing.
She noted that an immigrant household with two ITIN filer parents and two children would qualify for up to $ 1,200 in state incentive, which is about 21% of the federal shelter they are excluded from.
“More is needed to protect thousands of undocumented workers,” added Fanelly Millán, an organizer at the Pomona Economic Opportunity Center.
The governor and legislator-approved aid package also provides $ 2.1 billion in grants of $ 5,000 to $ 25,000, a program administered by California’s Office of the Small Business Advocate.
“This will help qualified small businesses economically devastated by the COVID pandemic,” said Senator Anna Caballero (D-Salinas), who drafted the subsidy bill. “As we know, small businesses across the state are struggling to survive on stay-at-home orders.”
She quoted a recent survey by the Small Business Majority advocacy group that found that 35% of small businesses were three months before closing if they were not receiving additional financial assistance.
Assembly James Gallagher (R-Yuba City) said on the ground during the debate that the emergency relief bill need not have been as big if the state had not forced businesses to close for so long.
“This governor arbitrarily and unilaterally decided to shut down mostly small businesses in this state and as a result many small businesses have already gone out of business,” Gallagher told his colleagues before joining the bipartisan vote to support the corporate subsidies law .
The legislature’s approval of the grant money came a few months after Newsom launched the program with an executive order that raised $ 500 million in grant money for 21,000 small businesses.
But the demand for the subsidies is greater than the available money. In the first round of grant awards, 350,000 small businesses submitted applications, seeking more than $ 4.5 billion, officials said.
Companies with annual gross sales of up to $ 2.5 million are eligible. Because not every applicant receives a grant, applications are ranked and assessed based on criteria including whether the company is in an industry most affected by the pandemic.
The applications will also be scored to ensure there is a wide geographic spread and that companies owned by people of color are fairly represented.
“Our commitment in that effort is for disadvantaged and underrepresented communities, which means we’ll be paying close attention to where those dollars are going,” Newsom said at a news conference in Arvin Monday.
Once a company is notified that it has been selected for a grant, it will face additional verification requirements before the money is disbursed, said Kaitlin Lewis, a state spokeswoman.
“All final awards will be completed within 45 business days of the close of a round and businesses will be verified and paid on an ongoing basis,” said Lewis.
Part of the aid package, scheduled for a vote this week, would allow businesses to deduct up to $ 150,000 in expenses covered by loans from the federal Paycheck Protection Program. More than 750,000 PPP loans were taken out by small businesses in California, officials said.
There will also be a two-year fee waiver for approximately 59,000 restaurants and bars licensed by the State Department of Alcoholic Beverage Control, according to bills passed Monday. They normally pay annual fees ranging from $ 455 to $ 1,235. More than 550,000 hairdressing and cosmetology licenses will also be waived.
In addition, $ 50 million will go towards grants for cultural institutions that have suffered financially from the pandemic. The package also includes fellowships for community students and additional money for daycare, food banks, diapers, and housing for quarantined farm workers.