Governor Newsom’s Revised Budget Blueprint Presents an Opportunity to Center Small Businesses in California’s Economy

“We are happy to see solid investment in small businesses included in Governor Gavin Newsom’s revised budget proposal. Our recent national poll revealed that 32% of small business owners were unsure how long their business would survive without additional funding or other market changes. California’s smallest business owners are among those job creators continuing to face financial challenges.  

We support the governor’s efforts to prioritize a budget that will create equity and help entrepreneurs thrive. The ‘May Revision’ includes investments in several policy areas that will help to promote greater access to capital, affordable healthcare, and a strong ecosystem aimed at helping to accelerate California’s small businesses and economic recovery, including: 

• $500 million for the California small business Hard-Hit Industries grant program administered by CalOSBA to stimulate growth for the top 10 industries hardest hit by the pandemic. 
• $304 million to bolster California’s premium assistance program for middle-income Californians. 
• $73 million for the Department of Healthcare Services to resume regular Medi-Cal eligibility operations, including annual redeterminations of beneficiary eligibility and the expansion of Medi-cal coverage regardless of immigration status.
• $500 million in one-time grant funding in 2024-25 to support the completion of the Broadband Middle-Mile Initiative.

We are also glad to see that the revised budget package includes support for working families to access child care. More than $883 million has been proposed to build infrastructure in child care deserts and low-income communities, reimburse provider rates for one year, and help small childcare business owners access capital. Additionally, the governor has proposed $157 million toward waiving child care family fees through June 30, 2023, to benefit 40,000 low-income California families, generating savings of up to $595 per month. With this revised budget, the governor is taking steps to create opportunities for the child care industry to thrive by investing in target programs for self-employed business owners, microbusinesses, and small business employees. 

Despite these positive proposals, we are disappointed that the revised budget still does not include investments in the Paid Family Leave (PFL) Program, a key component of supporting small businesses and working families. The PFL and State Disability Insurance programs are paid entirely through employee contributions, but many in the small business ecosystem cannot participate because the current wage replacement rate (maximum 70%) is inadequate. The revised budget also does not include increased funding for technical assistance through Women's Business Centers to make up for the loss of federal funding from the CARES Act. Compared to their male counterparts, women entrepreneurs lack access to social capital that helps an entrepreneur build a professional network and tap into specialized knowledge and resources. 

Small Business Majority encourages the subcommittee to consider the revisions proposed by Governor Newsom and advance critical investments needed for the small business community to grow and thrive.”

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