Overview of the February 23 Hearing

The focus of the JEDE Committee hearing is on current and proposed actions to support small business recovery from the economic impacts of the COVID-19 pandemic.  Agenda

The hearing will begin with brief introductory remarks by the Members of the Committee.  Dr. Robert Fairlie, professor of Economics at the University of California, Santa Cruz, will then brief the committee on his ongoing research which has found that small businesses, and especially businesses owned by people of color, have been deeply impacted by the COVID-19 pandemic. Using a simulation model, Dr. Fairlie estimates that between February 2020 and April 2020 there was a decrease of 41% among Black-owned businesses, 32% among Latinx-owned businesses, and 26% among Asian-owned business.  These findings are based on a series of his published work, including this May 2020 report, The Impact of COVID-19 on Small Business Owners: Evidence of Early-Stage Losses from the April 2020 Current Population Survey, which tracked outcomes between March 2020 and April 2020.  Dr. Fairlie has also examined the effectiveness of federal loan programs on reaching historically underserved business owners, including this January 2021 publication, Did the $660 Billion Paycheck Protection Program and $220 Billion Economic Injury Disaster Loan Program Get Disbursed to Minority Communities in the Early Stages of COVID-19?

Based on research such as Dr. Fairlie’s and others, California policy makers have focused much of their economic recovery efforts on small businesses.  In December 2020, the Governor announced, after consulting with Legislative leaders, a $500 million Small Business COVID-19 Relief Grant Program to help address the financial needs of historically underserved business-owner groups, businesses in areas most impacted by COVID-19 State-at-Home Orders, and industry sectors most impacted during the pandemic.  Assembly Jobs Committee Chair Cervantes, as part of this consultation period, submitted a memorandum to the Administration outlining key issues relating to equity, transparency, and accountability.  Since that time, $237.5 million in grants have been awarded and a second round of funding will be concluding within days of the hearing. 

The Legislature, at the time of the writing of this report, is also considering the approval of SB 87 (Caballero and Min), which would provide $2 billion in additional funding, based on certain statutory conditions being met.  The Governor’s Office of Business and Economic Development, including Senior Advisor and Director Dee Dee Myers, has been invited to discuss program implementation and outcomes, including the ability of the grant program to meet its priority application and award targets.

Following these two Agenda Items, the Members will hear from leaders of small business stakeholder groups on how existing state programs have evolved to meet the unique challenges brought by the COVID-19 pandemic.  Given the time limitations of the current hearing, three of the five primary small business development tools will be discussed, including technical assistance, access to capital, and workforce training.  Tax relief and procurement participation by small businesses and disabled veteran-owned businesses will explored at a future date.   The panelists include: 

  • James Watson, President of the California Manufacturing Technology Consulting (California’s Manufacturing Partnership) will discuss the how this federally designated and state and federally funded organization modified its program delivery and services to assist small and medium manufacturers remain viable during the pandemic, including shifting to the production of PPE.  The California Manufacturing Technology Consulting is one of 34 state grantees under the Small Business Technical Assistance Expansion Program.

  • Deanna Krehbiel, Executive Director of Economic Development & Corporate Training at San Bernardino Community College District and representative for the California Community College Contract Education Collaborative will share information on how the workforce centers quickly pivoted to online learning to serve the small business training needs for new and incumbent workers.   She will also discuss how contract education programs have used funding from the state Employment Training Panel to transition to online learning and focused on the evolving needs of essential workers and businesses.   

  • Bianca Blomquist, Senior Manager, California Policy & Engagement, Small Business Majority, will discuss the range of state lending programs the state is currently supporting, including the new California Rebuilding Fund.  The California Legislature approved $125 million in the 2020-21 Budget to expand the Small Business Loan Guarantee Program and establish California Rebuilding Fund, a direct loan program that blends state funds with other funds of community development financial institutions.  Small Business Majority and CAMEO are working with the California Infrastructure and Economic Development Bank on the deployment of the new and innovative loan product.  

Panelists will begin with short two-minute introductory remarks, followed by questions and discussion with the JEDE Committee Members.  Presenter background materials, available at the time of publication, can be found in the report appendices and though through the green side bar on the main hearing page at https://ajed.assembly.ca.gov/content/hearing-imapct-covid-19-pandemic-small-businesses

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