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Gavin Newsom reaches $9.5 billion stimulus deal with checks to families and help for businesses

Sacramento Bee - 2/18/2021

Feb. 17—California will send an extra $600 to low-income families and provide $2 billion in grants to small businesses hurt by the pandemic as part of a stimulus deal Gov. Gavin Newsom and lawmakers announced Wednesday afternoon.

The $9.5 billion package includes much of what Newsom proposed in January for "immediate action" to get money to struggling Californians quickly.

It builds on what Newsom had initially proposed, doubling payments for undocumented immigrant families and nearly quadrupling aid for small businesses.

Notably absent from the deal is a plan to reopen schools, which Newsom has been trying to negotiate for weeks.

The agreement announced Wednesday will provide help on top of the national stimulus package passed by federal lawmakers late last year that provides $600 to people making less than $75,000.

The $600 state payments will go to people who receive the California Earned Income Tax Credit, a credit for families earning less than $30,000 that includes some undocumented and mixed-status families. Newsom had proposed those payments in January.

After negotiations with lawmakers, Newsom agreed to also provide additional $600 payments to undocumented immigrant families who file using individual taxpayer identification numbers and qualify for the California Earned Income Tax Credit. Those families, who didn't receive federal relief, will receive $1,200 in state relief under the deal.

The agreement will also provide $600 payments to people on the state's welfare program CalWORKS, disabled and elderly people in the SSI/SSP program, and people in the Cash Assistance Program for Immigrants.

In total, the individual assistance payments will cost the state nearly $3.7 billion, according to an estimate by the state's Department of Finance.

The deal also includes $2 billion in aid for small businesses. Newsom had originally proposed $575 million for the program, which provides grants up to $25,000 for businesses hurt by the coronavirus.

"People are hungry and hurting, and businesses our communities have loved for decades are at risk of closing their doors," Senate President pro Tem Toni Atkins said in a statement. "We are at a critical moment, and I'm proud we were able to come together to get Californians some needed relief."

Under the deal, businesses that received loans through the federal Paycheck Protection Plan or the Economic Injury Disaster Loan program can deduct up to $150,000 in expenses covered by those loans on their state taxes.

The deal also includes:

— Fee waivers for 59,000 restaurants and bars licensed to serve alcohol and more than 600,000 licensed barbers and cosmetologists

$24 million to house agricultural workers who need to quarantine away from their families

$35 million for food banks and diapers

$100 million in financial aid for low-income community college students and $20 million to engage students who have left or are at risk of leaving because of the pandemic.

The deal will also distribute $400 million in federal funds for child care, which can provide $525 for each of the 400,000 children enrolled in state-subsidized childcare and preschool. The funds will also provide access to subsidized childcare for an additional 8,000 who are not yet enrolled in the system.

The agreement also restores $857 million cut last year from the University of California, California State University, the state court system and other areas.


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