Governor Newsom revised the state’s 2022-23 budget on May 13, 2022, which predicts revenues roughly $55 billion more than his January budget proposal. Furthermore, economic growth is forecast to remain at a somewhat slower pace than predicted in the governor’s January budget plan. General Fund revenues are estimated to reach $219 billion in the fiscal year 2022-23.
Governor Newsom’s May Revision of California’s Budget 2022-23
California is home to cutting-edge companies that have transformed the way people live and communicate throughout the world. It is a location where a single spark of an idea has the power to change the world and provide significant economic potential. It serves as a light for others to follow in the footsteps of shared prosperity and climate sustainability. It also houses world-class enterprises that exemplify California ideals and advocate for LGBTQ+ youth and reproductive rights.
The May Revision proposes an $8 billion investment over five years to improve the state’s energy system dependability and relieve consumers from rising power costs. This is in addition to the Governor’s Budget allocation of $2 billion for incentives for long-duration energy storage projects, renewable hydrogen, industrial grid support, and decarbonization initiatives.
In January this year, Startempire Wire reported the release of Governor Newsom’s State budget proposal of $286.4 Billion, also dubbed as California Blueprint. The proposed budget tackled five areas of California’s economy which included:
- Climate Change & Electrification
- Public Safety
Fast Forward to May Revision
The May Revision offers the following to maintain CalCompetes’ success:
- Extend the CalCompetes Tax Credit program to $180 million yearly through 2027-28.
- CalCompetes will give special consideration to each of these initiatives. Companies who migrate from states where anti-LGBTQ+ legislation has been implemented and Laws governing reproductive rights.
- Provide a one-time General Fund of $120 million for the CalCompetes award program’s second year. The money might also be utilized to provide needed matching funds for firms eligible for federal subsidies to fulfill the state and national security goal of growing domestic semiconductor study, development, and manufacture.
Converting Tax Credits Into a Single Grant Program for Climate Innovation
Two additional tax credits were suggested in the Governor’s Budget to aid California’s transition to a more climate-resilient future. The May Revision consolidates these tax credits into a single grant program administered by the California Energy Commission (CEC), with a total amount of $1.05 billion proposed in the Governor’s Budget ($100 million in 2022-23, $325 million in each of 2023-24 and 2024-25, and $300 million in 2025-26).
The grant program would offer funds to California-based businesses to conduct research on technology that will assist the state meet its climate goals. Suppose a firm makes an Initial Public Offering or a change in ownership event that leads to a larger than 50% change in the company’s capitalization table. In that case, recipients must return to the state. If specific contractually stipulated performance measures are fulfilled, the amount of return to the state if the firm has proved to be successful will be lowered. The CEC must also evaluate whether the firms’ investments are relocating from a state that has passed anti-LGBTQ+ or anti-reproductive rights legislation when granting funding.
Additional Relief for Hard-Hit Industries
The May Revision includes a one-time General Fund allocation of $500 million in 2022-23 for the California Small Business Hard-Hit Industries Grant Program, which is administered by the Office of the Small Business Advocate (CalOSBA), which is part of GO-Biz, to provide additional relief to small businesses most affected by the pandemic. For the top ten industries most damaged by the pandemic, this initiative will focus on economic recovery to speed employment development, promote fairness and inclusion, and generate sustained post-recovery growth. Depending on their yearly gross income, eligible small enterprises and charitable organizations can get grants ranging from $10,000 to $50,000.
Drought Relief Assistance for Small Agricultural Businesses
As mentioned in the Climate Change Chapter, California is still suffering from severe drought, wreaking havoc on the state’s agriculture industry. Farmers and a network of complementary and directly reliant companies, such as rice mills, agricultural supplies, professional services, and warehousing are among the firms affected. The loss of these enterprises might jeopardize the infrastructure needed to support California’s agriculture industry and the communities that rely on it.
The May Revision provides a one-time General Fund allocation of $75 million in 2022-23 for the California Small Agricultural Business Drought Relief Grant Program, which would directly assist qualifying agriculture-related companies impacted by severe drought.
Grants range from $30,000 to $50,000, depending on annual gross revenue decline, and will be given first to businesses in drought-affected areas, such as the Sacramento-San Joaquin Valley, and then to companies in other drought-affected regions, as determined by the California Department of Food and Agriculture.
CalOSBA will operate the program in collaboration with the California Department of Food and Agriculture, and it will be modeled after existing CalOSBA small business assistance initiatives.
Read the complete report here: https://www.ebudget.ca.gov/2022-23/pdf/Revised/BudgetSummary/FullBudgetSummary.pdf