When the global COVID-19 pandemic reached the U.S. in early 2020, California Gov. Gavin Newsom wasted little time in organizing a comprehensive statewide response.
Newsom quickly marshaled resources to care for the sick, prevent the spread of the disease, and provide relief for displaced workers and hurting companies. After devoting the bulk of his time during March, April, May and June to lead during the crisis, he signed into law a comprehensive 2020 Budget Act on June 29 to bolster emergency response, protect public health and safety, enable economic recovery, and close a $54.3 billion budget shortfall caused by the COVID-19 recession.
“In the face of a global pandemic that has also caused a recession across the world and here in California, our state has passed a budget that is balanced, responsible and protects public safety and health, education, and services to Californians facing the greatest hardships,” said Newsom.
The budget included critical investments to save lives and promote economic recovery. It also supported job creation and economic recovery among small businesses, which were disproportionately hit the hardest during the pandemic-induced recession.
Even going back to the beginning of the crisis, California has been doing more than any other state to stem the tide of the outbreak and its devastating effects on health and the economy. As of October 6, California had administered more than 15.3 million tests for COVID-19, far more than any other state, and had drastically lowered its fatality rate from the disease. Through October 6, the state had reported 828,461 confirmed cases and 16,177 deaths.
California companies had also stepped up to the plate and led the charge. In the fight against COVID-19, Silicon Valley biotech firms and other organizations around the state have been hard at work searching for a vaccine, a treatment and a cure.
Among the many California-based companies serving on the front lines of this biotech battle are YourChoice Therapeutics, ANA Therapeutics, Quotient Sciences, Gen1E Lifesciences, Synkrino Biotherapeutics, PostEra, Bot MD and Atomwise. In addition, other life science firms are battling the disease on other fronts. San Francisco-based fashion startup Vida & Co., for example, recently added a line of high-end protective face masks; and Y Combinator says that more than 45 of its health-care startups are behind various efforts to tackle the crisis, ranging from producing treatments and testing kits to making protective gear.
Whatever a company needs to cope with COVID-19 and its adverse economic impact, the state is ready with resources to help, says Kaitlin Lewis, spokesperson for the Governor’s Office of Business and Economic Development. “GO-Biz has compiled helpful information for employers, employees, and all Californians as it relates to the coronavirus pandemic,” says Lewis. “You can find that all-inclusive information on our COVID-19 website, which is regularly updated: https://business.ca.gov/coronavirus-2019/. This website includes resources for all businesses, connection to personal protestive equipment, and resources from other agencies.”
In addition to this regularly updated website, GO-Biz creates and sends out a weekly email newsletter that shares the latest information and resources.
“Our team regularly participates in virtual meetings with city, county, state and international leaders,” says Lewis. “We share facts about California every day through the work we do to promote the continued leadership of this state. Innovation is central to our economy. There are more startups, more engineers, more scientists, more researchers, and more Nobel laureates in this state than anywhere in the nation. Because of that, California entrepreneurs received more than $67 billion in venture capital funding last year — more than three times the second-highest state for deal flow.”
Gov. Newsom has applied that same level of entrepreneurship to his efforts toward overcoming the pandemic and corresponding recession. His Budget Act of 2020 includes $5.7 billion to respond directly to the COVID-19 pandemic. Expenditures include PPE necessary to reopen the economy, hospital surge preparation, and other expenditures to support populations at greater risk of contracting COVID-19. The budget also includes a $716 million reserve within the Special Fund for Economic Uncertainties so the state can respond quickly to the changing conditions of the pandemic.
The budget provides an additional $75 million for loan loss mitigation and reducing the cost of capital for small businesses to address gaps in available federal assistance. These funds are being administered by the California Infrastructure and Economic Development Bank. The budget also expands the $800 Minimum Franchise Tax exemption for first-year corporations to all businesses — removing a barrier to small business creation for all types of small businesses.