California virus aid plan would pay $600 to millions of low-income residents

SACRAMENTO, Calif. - Millions of low-income Californians would receive $600 checks under a $9.6 billion coronavirus aid package announced by Gov. Gavin Newsom and legislative leaders.

The plan announced Wednesday would cut checks to about 5.7 million people who earn less than $30,000 per year, as well as some immigrants living in the country illegally who were excluded from federal COVID-19 relief payments made during the Trump administration.

The plan also provides a new round of small business grants and more housing assistance for farmworkers infected by the virus.

The plan "will help those who are hurting most," Assembly Speaker Anthony Rendon said in a joint statement. "We are building an economic foundation for the recovery of jobs, small businesses and, indeed, our everyday lives."

"We wouldn’t be here today it it weren’t for both rounds of PPP funding. That’s pretty much keeping us alive right now," said Richard Mitchell of Luka's Taproom and Lounge in Oakland.

Luka's Taproom and Lounge is another restaurant that's gone out of its way to keep the doors open. The business received federal help from the Paycheck Protection Program and Small Business Administration, but the future is still looking cloudy.

"I’ve already had money taken out of my account to start servicing the debt," said Reign Free of Red Door Catering.

The Legislature plans to quickly take up the measure, with votes expected as early as Monday after budget committee hearings starting Thursday. Legislators are hoping that money for some of the largest segments of the plan can be distributed in April.

The plan calls for more money than Newsom proposed in his state budget last month, due in part to state revenues that came in more than $10 billion higher than expected.

About 5.7 million low-income residents would be eligible for one-time payments. Those getting $600 include households that received a California earned income tax credit in 2020. That carries the biggest price tag in the relief package, at $2.3 billion.

Immigrants and others who lack Social Security Numbers but have Individual Tax Identification Numbers, income below $75,000 and were ineligible for recent federal payments would get $600 — boosted to $1,200 if they also qualify for the California earned income tax credit.

The plan also widens Newsom's original plan by providing payments to some people who receive supplemental income under various state and federal programs, including immigrants and people who are 65 or older, blind or disabled.

The timing of those payments is being worked out with federal officials.

For small businesses affected by the pandemic, the package quadruples to more than $2 billion in money available for grants of up to $25,000. Newsom last month had recommended adding $500 million to the program but state lawmakers thought that figure was too small.

More half the 120-member Legislature signed on to a proposal to put $2.6 billion of California’s unanticipated revenue into one-time grants for small businesses and nonprofits.

Also under the new plan, more than 750,000 small businesses would be able to deduct on their state taxes up to $150,000 in loans they received under the Paycheck Protection Plan. The same ceiling would also apply to firms that received Economic Injury Disaster Loans, amounting to a combined $2 billion in tax cuts.

About 59,000 restaurants and bars would separately get two years of waived annual license fees that can range from $455 to $1,235. More than 600,000 barbering and cosmetology individuals and businesses will also be able to keep their usual licensing fees for two years.

"People are hungry and hurting, and businesses our communities have loved for decades are at risk of closing their doors," Senate President pro Tempore Toni Atkins said in lauding the agreement.

Additional money also will be allotted for state-subsidized child care and preschool providers that collectively serve about 400,000 children, as well as low-income students in the University of California, California State University and California Community College systems.

Finally, a fresh $24 million would be provided for a program that puts farm and food processing workers up in hotels if they contract the virus and have no place to isolate, Newsom said Wednesday as he spoke at a community vaccination clinic in the Coachella Valley, a region that’s home to many farmworkers.

The governor’s visit to the Coachella Valley was his latest stop in a tour around the state to highlight vaccination efforts as California’s virus numbers continue to improve. The state’s test positivity rate, hospitalizations and deaths are all down, and the rate of people spreading the virus to others is now at its lowest in months.

California has now administered more than 6 million vaccines, but the rollout has been slow and rocky and demand continues to far exceed supply. The state is in the process of shifting to a new distribution system run by insurer Blue Shield, which will take some decision-making power away from counties.

Associated Press journalist Amy Taxin in Orange County and Adam Beam in Sacramento contributed to this KTVU report.