CSAC Bulletin Article

Governor and Legislature Reach COVID-19 Relief Budget Agreement

February 18, 2021

The Governor, Senate President pro Tempore, and Speaker announced they reached an agreement yesterday on a COVID-19 relief budget package. In his January Budget proposal, the Governor outlined his intention to take a series of early budget actions in response to the urgent needs of the pandemic and availability of one-time state funding. The set of immediate budget actions in yesterday’s agreement modifies and builds off of his original proposals. Overall, the package totals $9.6 billion with the core two pieces providing relief payments to lower-income Californians and grants for small businesses that have been negatively impacted by the pandemic and economic recession.

The individual relief payments would provide $600 to individuals that have been most impacted by the economic recession and are estimated to cost $3.7 billion. This includes households receiving the Earned Income Tax Credit in 2020, taxpayers with Individual Tax Identification Numbers who were not eligible for the federal stimulus payments, CalWORKs households, and recipients of SSI/SSP and Cash Assistance Program for Immigrants. For the payments to CalWORKs households, counties will play a role in distributing this funding to families. CSAC will work with the County Welfare Directors Association and the Administration as the process is established and guidance issued and will provide updates to counties as information becomes available.

For small businesses, the agreement would provide $2.075 billion in grants. Businesses with annual gross revenue up to $2.5 million that have been impacted by COVID-19 would be eligible to apply for grants of up to $25,000. Of those funds, $50 million is set aside for nonprofit cultural institutions with decreased revenues, such as museums, parks, and performing arts companies. Additional business relief provisions would exclude Paycheck Protection Plan loans from their taxable income and provide relief from state licensing fees for restaurants, bars, and barbering and cosmetology businesses.

The early budget package also includes several other pieces of relief that are significant for counties:

  • The agreement allocates $400 million in federal funds for child care. This funding will be used to provide a $525 stipend per child for child care and preschool providers that are state-subsidized and will increase access to subsidized child care for 8,000 children of essential workers.
  • Funding is provided to support the enrollment of college students who are newly eligible for CalFresh. These resources include $6 million for outreach and application assistance and $12 million for county administration. Counties need this funding to effectively respond to the increased administrative workload that will result from the expansion of CalFresh eligibility.
  • In October, several reductions occurred as part of the federal trigger agreement in the current year budget, where cuts automatically went through when sufficient federal coronavirus relief was not provided in time. One of those cuts was funding for Local Child Support Agencies and this agreement would restore that reduction.
  • AB 101 (Committee on Budget, 2019) appropriated $500 million over a four-year period for the California Housing Finance Agency to finance low and moderate-income housing. This budget agreement restores $50 million for moderate-income housing that had been rescinded in October when additional federal coronavirus relief was not allocated to California.
  • The agreement provides $24 million for the existing Housing for the Harvest program, which provides shelter and support for farmworkers who need to quarantine because of COVID-19.

The different elements of this agreement are now included in a series of budget bills listed below. The Legislature is anticipated to vote on this package next week.

  • AB 85 / SB 85 Budget Act of 2020
  • AB 80 Paycheck Protection Program
  • AB 81 / SB 92 General Federal Relief and Cleanup
  • AB 82 / SB 93 Memorandum of Understanding
  • AB 83 / SB 94 Small Business Licensing Fee Exemptions
  • AB 88 / SB 88 Golden State Stimulus
  • SB 87 Small Business Grants
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