Governor Newsom First Budget Proposal: Continued Funding for Small Business Programs Important Step in Prioritizing Small Business Growth

“We are glad that Governor Gavin Newsom’s January 2024-25 budget proposal maintains funding for programs that small businesses rely on but we hope the governor’s review in May will include increases for programs and services essential to job creation, workforce development, and overall small business growth.

Many provisions included in this year’s January proposal would support efforts to start or grow a business. Small business owners are encouraged by the following proposed investments: 

• Expanding healthcare coverage for more Californians. Immigrants are twice as likely to own a small business compared to those born in the country. Expanding  Medi-Cal eligibility for all low-income Californians, regardless of immigration status, will close a gap in healthcare access and ensure more uninsured entrepreneurs have access to the healthcare they need. 

• Supporting transparency and oversight to access responsible capital. One of the most significant challenges small businesses and entrepreneurs face is accessing capital. Maintaining funding for the Department of Financial Protection and Innovation will support oversight of the financial institutions small businesses rely on to protect them from unfair financing practices. 

• Investing in access to affordable childcare. Quality and affordable childcare boosts entrepreneurship and ensures small business employees can fully participate in the workforce. Sustaining robust state investments in childcare will help to mitigate the impact of the federal childcare funding crisis on California’s childcare providers and families. 

While the current proposed budget maintains funding for measures that make it easier for Californians to start and grow a business, we are disappointed that the proposal excluded previously funded programs that promote equity in entrepreneurship. For example: 

• It is unfortunate that no funds were set aside for the California Employee Ownership Hub, which creates an easier path to entrepreneurship for small business employees within their local community. 

• To help the state reach its commitment to set a 25% inclusive procurement goal, we urge the governor to include technical assistance funding to ensure under-resourced entrepreneurs receive the assistance they need to apply for state and federal government contracts.

• The proposal to delay $300 million in funding for the California Jobs First Initiative (formerly Community Economic Resilience Fund) is a step back from the state’s previous commitment to create more inclusive employment opportunities. This program relies on continued funding to help remove barriers to employment for diverse communities and improve access to workforce development. 

We encourage Governor Newsom and the California State Legislature to enact forward-thinking budget proposals that will deliver essential resources to the small business community and promote inclusive small business growth. We look forward to advancing efforts this year to expand upon the January proposed budget, creating meaningful policy solutions. 

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