Fresno lawmaker’s good idea: Give $2.6 billion of California surplus to small businesses

In September Yelp.com issued a report that examined how the coronavirus pandemic was hitting the nation financially.

The data for California were sobering: 19,200 businesses permanently closed and nearly another 20,000 temporarily closed. Yelp, an online company in San Francisco that provides business reviews, used information submitted by owners about their operations. If anything, the numbers might be conservative, given the potential for under-reporting.

The Yelp report showed that California had more business problems, by far, than any other state. Second-worst was Texas, with 9,000 permanent closures and 5,300 temporary ones.

Given that 90 percent of the businesses in California employ 20 people or less, it is not surprising that state lawmakers might want to figure out how to support them in this challenging time.

State Sen. Andreas Borgeas, the Republican from Fresno, has an idea: Take $2.6 billion from the state’s projected $26 billion budget windfall this year and offer grants to small businesses.

That concept has been fleshed out into Senate Bill 74, which he introduced earlier this month with state Sen. Anna Caballero, the Salinas Democrat who also represents the westside areas of Fresno County and most of Madera and Merced counties. Thirty-seven other lawmakers are signed on — including Democrat Sen. Melissa Hurtado of Sanger and San Joaquin Valley Republicans Jim Patterson, Frank Bigelow and Devon Mathis from the Assembly.

Using 10 percent of the unexpected state budget surplus is a worthy idea. Though the details have yet to be worked out — like the size of the grants and who could qualify — the Legislature should back this concept and make it work. And it should do so quickly, as businesses are struggling to remain viable in the latest round of stay-at-home orders issued by Gov. Gavin Newsom to try to stem the rampaging COVID-19 infection rate now afflicting California.

Grants for small businesses

The bill is called the Keep California Working Act. It calls on the Small Business Advocate program in the governor’s office to administer the grants, which could also be awarded to small businesses of 100 employees or less, as well as nonprofits.

To get a grant, a business or nonprofit would have to show it has “experienced economic hardship resulting from the COVID-19 pandemic.”

The bill would be an urgency measure, intended to take effect as soon as it is signed by the governor.

Newsom has also proposed spending $500 million in grants to help small businesses. Pair with the legislative action, that would be over $3 billion in assistance.

Shoring up economy

Borgeas expects such strong support from his colleagues in the Senate and Assembly that he does not call SB 74 a bipartisan measure. “It is nonpartisan,” he said in an interview with The Bee Editorial Board.

There are many pressing needs in California, Borgeas admits, like shoring up mental health systems or aiding local governments struggling in the pandemic.

But to him, the bottom line is clear: “California’s status as the fifth-largest economy in the world won’t stand much longer if we don’t make investments into our small businesses.”

The concept is sound and the need is great. Now it is up to Borgeas, Caballero and their colleagues to make it become actual dollars for small businesses.

This story was originally published December 23, 2020 at 9:58 AM.