Newsom proposed budget includes stimulus payments, aid for small businesses

Gov. Gavin Newsom. Courtesy of the Office of the Governor

Gov. Gavin Newsom unveiled Friday his $227 billion budget plan, one that proposes immediate relief to low-income families and $15 billion in economic relief as California continues its deadly battle against the coronavirus pandemic. 

The proposed budget targets five urgent matters: vaccinating people, safely reopening schools for in-person instruction, support for small businesses, putting money into people’s pockets and wildfire preparedness. 

“In these darkest moments of the COVID-19 pandemic, this budget will help Californians with urgent action to address our immediate challenges and build towards our recovery,” said Newsom. 


Newsom’s focus is on “getting out of the freezers and administering into people’s arms, these vaccines,” he said, which must be done to “safely reopen for in-person instruction in our schools, to reopen our small businesses as well as our businesses large and small all across the state of California.” 

The budget sets aside $372 million in state funds to expedite the COVID-19 vaccine rollout, which can be allocated immediately, he said. It also includes $4.4 billion in emergency response to the pandemic, including $2 billion for testing and $473 million in contact tracing. Anticipated federal funds — $1.7 billion for testing and contact tracing and $350 million for vaccines — could either be used in addition to the state’s costs or offset them, according to Newsom. 


The proposed budget reflects California’s highest-ever funding for public schools with $85.8 billion, which would cover $2 billion to accelerate in-person learning starting in February based on a phased-in approach with the youngest students. It also sets aside $4.6 billion to expand learning opportunities, such as summer and after-school programs, and $400 million for school-based mental health. 

Small businesses 

Newsom is calling for $4.5 billion for job creation and economic recovery, including $1.1 billion in immediate relief for small businesses, $777.5 million to provide incentives to create jobs and $353 million for workforce development. 

He is also proposing $575 million for grants to small businesses and small nonprofit cultural institutions impacted by the pandemic, as well as $70 million to offer fee relief for them, including those in the personal services and restaurant sectors. 

Direct payments and rent protections

Those who earn less than $30,000 a year could receive state stimulus payments of $600 starting next month if the budget is approved. This move would place “$2.4 billion into the pockets of 4 million Californians … to help them with a spectrum of supports they so desperately need at this moment.” 

The governor is also pushing for an extension of the statewide ban on evictions as the deadline on renter protections is set to expire on Jan. 31. California is expected to receive $2.6 billion in federal rent relief. 

Wildfire preparedness 

More than 4.17 million acres burned due to wildfires in California last year, setting a new record high, according to CalFire. 

The governor is calling for $1 billion to address a comprehensive wildfire and forest resilience strategy.

The state budget also includes $1.5 billion to help California reach its zero-emission vehicles goal by 2035 and $100 million in climate innovation. 

State Sen. Scott Wilk, R-Santa Clarita, and Assemblywoman Suzette Valladares, R-Santa Clarita, were critical of the Democrat governor’s budget in statements issued Friday.

Wilk’s statement said the budget “reflects how out of touch the governor is with the priorities of average Californians.” 

“As a member of the Senate Budget Committee, I look forward to dissecting the governor’s plan and ensuring our state resources are laser-focused on what matters to real people – the pandemic, getting kids back in school and people back to work, helping our small businesses recover and massive reform at the state’s disgrace of an unemployment insurance agency,” said Wilk.

“The governor’s budget fails to address the most critical and urgent matters facing Californians — the failure of EDD, the failure to return our children to school, the failure of meaningful support and reform for small businesses, and the failure to adequately address the wildfire and energy crisis,” said Valladares. 

Lawmakers are expected to begin the process of evaluating the proposed budget as early as next week. 

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