Here’s how the federal deal on coronavirus affects Californians
$3,400 for a family of four.
Up to $1,050 a week for someone who’s lost their job.
And federal money for small businesses so they can keep employees on the payroll.
Those are the lifelines California residents, as well as people across the country, would see within weeks under the $2 trillion economic stimulus plan that Congress is to begin considering.
The plan, negotiated by Senate Republican and Democratic leaders and Trump administration officials, needs approval of both chambers. The Senate passed the measure late Wednesday, and House will consider it Friday.
Gov. Gavin Newsom applauded the effort, but said he still feels strongly that more needs to be done. He said the state will receive $10 billion in block grants - $5 billion directly for state operations, and more for cities and counties.
He said the additional unemployment benefits will be necessary to help with an explosion in state claims since March 13.
“One million Californians have now proclaimed the need to get unemployment insurance,” he said.
The plan to fight the economic downturn caused by the spread of the coronavirus has four key elements that could provide the state with immediate help. There’s aid to consumers, health care providers, state and local governments and small businesses.
With the legislation still subject to changes, here’s a quick look at what the stimulus plan could mean to local residents and businesses:
Cash payments
Many adults would get a $1,200 payment, as well as $500 per child. The payments would likely be made by direct deposit.
The grants are expected to be phased out for individuals who earned more than $75,000 and joint filers who made more than $150,000. Income would be based on 2018 tax returns unless one has already filed 2019 returns.
For people out of work, who can now get up to 26 weeks of unemployment compensation in California of $40 to $450 weekly, they could receive another $600 each for four months in addition to their regular benefits. Gig workers, self-employed workers and those furloughed would be eligible.
The bill would also provide an additional 13 weeks of regular benefits.
The Employment Development Department estimated this week that about 17.5 million workers in California are covered by the state’s unemployment insurance program.
They are the workers whose employers are contributing on their behalf to the state’s unemployment insurance trust fund, which pays the benefits.
But, said department spokeswoman Loree Levy, “There are coverage options for the self-employed if they choose to contribute on their own behalf. Otherwise, they may not be covered for benefits if they lose work and wages through an incident like the COVID impact we are experiencing.”
Small business
A business with 500 or fewer employees, including certain non-profits, would be able to get loans from Washington to pay employees, mortgages and rent, and the loan would be forgiven.
The $350 billion national program would provide eight weeks of cash flow assistance to small businesses through federally guaranteed loans to employers who maintain their payroll during this emergency, according to a fact sheet from the Senate’s Small Business Task Force.
The fact sheet said that the loans would equal 250 percent of an employer’s average monthly payroll.
If employers maintain their payroll, the loans would be forgiven. The program would cover payroll costs, paid sick leave, supply chain disruptions, employee salaries, health insurance premiums, mortgage payments, and other debts.
Sacramento currently has a no-interest loan program for small businesses affected by the coronavirus outbreak.
Last week, it began taking applications for help from a $1 million emergency relief fund. In only 48 hours, it received 3,000 applications, and on Sunday it stopped taking applications. The fund will make no-interest loans up to $25,000 for small businesses.
Health care system
There’s a long list of new funding sources to help the health care system in the state.
The biggest is a new $100 billion program providing direct financial aid to hospitals, public entities and others involved in fighting the coronavirus. It’s unclear how much California could receive.
The state is also likely to benefit from $16 billion in new money nationally to replenish the Strategic National Stockpile supplies of medicine, personal protective equipment and other supplies that go to state and local health agencies.
In addition, $1.5 billion would be available to the state and local governments “to prevent, prepare for, and respond to the coronavirus, including for the purchase of personal protective equipment; laboratory testing to detect positive cases, infection control and mitigation at the local level to prevent the spread of the virus and other public health preparedness and response activities.” The stimulus bill approved last week provided $1 billion.
Also getting more funding: money for a hospital preparedness program aimed at fighting special pathogens that uniquely affect states and local areas
State and local government help
A total of $150 billion could be available nationally to help maintain health, education and other essential services. California will likely need the help.
“Even in a moderate recession, revenue losses could be significant,” said the governor’s 2020-21 budget summary.
Gov. Gavin Newsom said on March 15 that “we’ve never been in a better position to weather a recession,” and state has a $20 billion “rainy day” fund and other reserves it saved during years of surpluses.
But during the 2007-09 recession — when unemployment peaked at a level that’s expected to be topped as soon as this month — state workers endured unpaid “furlough Fridays.”
There are several other aid programs that could benefit the state. The stimulus provides potential funding for local community-based organizations through the Community Development Block Grant program. The funds can help pay for emergency assistance and other social services.
New money could be available through the Low Income Home Energy Assistance Program, which helps pay utility bills.
And Newsom could get a share of a $3 billion fund to allocate as he sees fit to help local educational agencies that he deems most impacted by the coronavirus.
The money is to provide “educational services to their students and to support the on-going operations of the local educational agency; and provide emergency support through grants to institutions of higher education serving students within the state.”
This story was originally published March 25, 2020 at 1:05 PM with the headline "Here’s how the federal deal on coronavirus affects Californians."
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