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CRC Applauds Gov. Newsom’s Tax, $500 Million Small Business Relief Plan
The California Reinvestment Coalition (CRC) applauds Gov. Gavin Newsom’s plan to provide immediate financial and tax relief for small businesses hit hard during the COVID19 pandemic. The plan was announced Monday, Nov. 30.
The relief measures— automatic three-month income tax extension for taxpayers filing less than $1 million in sales tax and $500 million in new COVID19 relief grant funding— will be especially important for small businesses owned by People of Color and for small businesses located in rural parts of the state.
“Black, Indigenous, and People of Color (BIPOC) owned small businesses have suffered disproportionately from the economic impacts of COVID19 and received the least amount of assistance. This is the direct result of a financial system that has excluded us from participating in or has directly extracted wealth from our families and communities. We thank Governor Newsom for the much needed direct grant support for small businesses. This is an important first step as we look towards building structural solutions in California that can finally end the generations of exclusion that have led to these disparities,” said Paulina Gonzalez-Brito, Executive Director of California Reinvestment Coalition.
CRC earlier this year submitted a comprehensive proposal for saving small businesses that included $300 million in grant funding for small businesses. CRC’s proposal was based on findings that 92% of small businesses were in need of direct grant assistance from the federal government.
“We appreciate Gov. Newsom’s and Legislature’s commitment of $500 million to support small businesses in our state. However, we want to be sure that the funds are targeted to those small businesses owned by BIPOC entrepreneurs, which have been left out of the federal and state programs deployed over the last nine months,” said CRC member Robert Villarreal, Executive Vice President of CDC Small Business Finance and President of the Small Business Finance Fund.
CRC member Tate Hill, Executive Director of Central Valley-based Access Plus Capital, says BIPOC-owned businesses suffer from underinvestment and have often been excluded from accessing capital from mainstream financial systems. He says the underinvestment is particularly stark in rural and inland parts of the state, like the Central Valley and especially difficult during the pandemic. In Fresno, for example, Black-owned businesses make up less than 4% of all small businesses in the city. Those businesses, Hill says, have been underrepresented even as grant programs have been put in place to support small businesses in this challenging time.
“While this relief package provides much-need assistance to small business owners, it’s important to ensure that policies and practices are put in place so that BIPOC business owners, and inland and rural communities, aren’t left behind,” Hill says.