L.A. AREA CHAMBER STATEMENT ON PROPOSED STATE BUDGET

by L.A. Area Chamber

LOS ANGELES, CA – January 11, 2022 – Yesterday, Governor Newsom released his proposed state budget, the California Blueprint, highlighting funding for infrastructure, small business, housing, education, and health care. The Los Angeles Area Chamber of Commerce applauds the Governor’s budget, with five priority areas aimed at fighting COVID, combating the climate crisis, confronting homelessness, tackling the cost of living, and ensuring the safety of all Californians.

In response to the Governor’s budget, L.A. Area Chamber President and CEO Maria S. Salinas said, “We are grateful the Governor’s proposed budget recognizes both the pressing needs of Californians and takes common sense steps towards helping our communities move beyond the pandemic and strengthen our economy for a brighter future.” Salinas continued, “The budget includes investments in infrastructure, education, and workforce development, tax credits and incentives to bolster job creation, and continued support for small businesses. We appreciate the Governor’s efforts for a promising start and look forward to continuing to work with Governor Newsom.”

The Chamber released a brief analysis of some of the most critical proposed budget items affecting the L.A. region’s business community:

Economic Growth and Tax Relief  

The budget provides crucial tax relief for businesses large and small. It includes business tax credits, including research and development credits and restoring credits for net operating losses that were limited due to COVID-19. It also includes a grant amount exemption for programs such as the Shuttered Venue Operator Grant Program offered by the federal government. The Administration notes that these changes should be made in time to assist businesses with their 2021 tax liabilities before the March 15, 2022 tax filing and payment deadline.  

Small Business 

The Governor’s budget includes significant investments in the state’s small business community. It includes tax relief for businesses impacted by the pandemic, fee waivers for new businesses to encourage business growth, additional funding to bolster existing grant programs, technical assistance centers, and new programs to support entrepreneurs. However, due to the increase in business taxes, we encourage the Governor to create additional tax credits and incentives for small businesses.  

General Fund

The proposed budget allocates $3 billion General Fund over the next two years to reduce the Unemployment Insurance Trust Fund debt owed to the federal government. Over the long-term, this will reduce costs to the state and benefit employers by reducing debts accumulated during the pandemic.

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