Local Leaders Hope Proposed California Budget Will Help Businesses, Schools

January 11, 2021 Updated: January 12, 2021

Orange County leaders say they’re optimistic the recently-released draft budget will benefit local businesses and public schools.

“We think that this budget that the governor presented has a number of good things in there that are steps in the right direction of giving the mainstream mom-and-pop [shops] more hope and support that they desperately need,” John Kabateck, state director of the National Federation of Independent Business, told The Epoch Times on Jan. 11.

California Gov. Gavin Newsom released a proposed $227.2 billion budget for fiscal year 2021–2022 on Jan. 8, a new record for the state, with significant funds earmarked to aid economic recovery from the COVID-19 pandemic.

The budget features funding for economic relief, public schools, health measures, and more—including a $14 billion economic recovery allocation to provide relief for working families and small businesses, facilitate the safe reopening of schools, and invest in zero-emission vehicles.

The budget economic recovery fund includes $3.5 billion earmarked for immediate relief for individuals and small businesses affected by the pandemic, and the budget also includes another $575 million in small business grants.

Kabateck acknowledged the budget has a number of good items, but said additional resources should be given to small businesses.

“We’d like to see significantly more dollars go out to Main Street and the people who are desperately needing them to keep the lights on,” he said.

According to Kabateck, if economic conditions do not improve for small business owners in the next few months, 25 percent of small businesses will be forced to close their doors.

“The budget right now has a significant surplus,” he said. “That’s welcome news. But let’s make sure it’s appropriated to those who need it—our number one job creators, small businesses.”

Kabateck said that the $575 million granted to small businesses was very welcome because it didn’t force them to take on more debt. But the small business advocate questioned the yearly budget’s $1.5 billion infrastructure investment, which includes incentives for zero-emission vehicles meant to “spur economic activity while supporting the state’s zero-emission targets.”

“I think it’s admirable to have electric cars and to have goals for renewable [energy], electric vehicles, and greener, healthier economies, but what we need right now is not electric vehicles. … We need to support the electricity that mom-and-pops rely on,” he said.

The budget also includes a $2.4 billion “Golden State stimulus” which will give a payment of $600 to low-income workers.

Public schools are set to receive close to $90 billion, with $85.8 billion thanks to Proposition 98, which requires a minimum percentage of the state’s annual budget to be spent on K-12 education.

The economic recovery package also includes $2 billion in Proposition 98 funding to enable the safe reopening of schools in February and the return to in-person instruction. The budget report notes that parents who have been taking care of children will be able to return to the workforce as a result of in-person instruction, removing a heavy burden on those who have been out of work.

Noting that the COVID-19 pandemic has taken a toll on younger students, Newsom’s proposal offers $400 million in one-time funding to help support mental health services in schools.

State Senator Pat Bates, a Republican who represents Orange County’s Laguna Niguel, voiced approval for most of the budget but stressed fiscal responsibility.

“The final budget that the governor signs this year must fund essential services without making new spending promises we cannot keep,” Bates said in a statement.

“I welcome the governor’s budget efforts to strengthen public health, speed up vaccine distribution, and reopen our schools, which cannot come soon enough for millions of kids who are falling further behind in their educational and social development,” she said.

“It is also encouraging to see the governor make small businesses and their workers a priority after forcing many of them to shut down.”

But Bates also noted that fixing the problems in California’s Employment Development Department, which she said has had many failures, needs to be a top priority.

“Unemployed Californians have had to go through weeks of hell to receive their benefits even as prisoners and con artists were able to quickly obtain billions of dollars,” she said.

Superintendent Dr. Al Mijares of the Orange County Department of Education called the spending plan “a positive first step” in a Jan. 11 statement sent to The Epoch Times.

“We are pleased to see that education continues to be a top priority in the governor’s budget. At the same time, we recognize that this favorable revenue picture will not last forever, with deficits already projected for 2022–23,” Mijares said.

“It is therefore imperative that we remain circumspect and not overcommit resources while making prudent investments both in the students who need to be brought up to grade level as well as those who need more opportunities to participate in the most challenging courses, including high-level career technical education.”

California’s current fiscal year ends on June 30. The proposed budget must be approved by July 1 by the California Legislature to become active.

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