2024-25 Budget: State Assistance to Businesses in Response to COVID-19 (January 2024) — An LAO Report
Summary
An LAO report titled State Assistance to Businesses in Response to COVID-19, part of the 2024-25 Budget series, dated January 2024 and prepared by Ann Hollingshead. The introduction says the first section gives background on state and federal programs, the second describes the industries that received the most public assistance, and the third describes the types of communities, defined using zip codes, that received more assistance. The text covers the Paycheck Protection Program, the Restaurant Revitalization Fund, Shuttered Venue Operators Grant and EIDL advance grants, and the California Small Business COVID-19 Relief Grant program, administered by Lendistry with grants between $5,000 and $25,000. The report states that state grants totaled roughly $4.5 billion across all programs.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“2024-25 Budget: State Assistance to Businesses in Response to COVID-19 (January 2024) — An LAO Report.”
Original at lao.ca.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/lao-state-assistance-to-businesses-in-response-to-covid-19-jan-4-2024-7c89573c4c/
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2024-25 BUDGET
State Assistance to Businesses
in Response to COVID-19
G A B R I E L P E T E K | L E G I S L AT I V E A N A LY S T
JANUARY 2024
www.lao.ca.gov 1
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INTRODUCTION
This report provides an analysis of state types of communities, defined using zip codes,
assistance given to businesses in response that received more state and federal assistance.
to COVID-19. The first section of this report The report concludes with some findings and
includes background information on the state and comments for the Legislature. This report fulfills
federal programs that provided both broad and our statutory requirements under Section 16 of
targeted relief to businesses. The second section Chapter 55 of 2022 (AB 194, Committee on Budget)
describes the industries that received the most and Section 22 of Chapter 3 of 2022 (SB 113,
public assistance. The third section describes the Committee on Budget and Fiscal Review).
WHAT ASSISTANCE DID THE STATE AND FEDERAL
GOVERNMENTS PROVIDE?
Pandemic Had Significant Economic Impacts. Later in 2020, the federal government provided a
In early 2020, in response to the onset of the second round of PPP loans to businesses that had
COVID-19 pandemic, state and local officials took no more than 300 employees and a 25 percent
steps to limit the spread of the disease. This included reduction in gross receipts between 2019 and 2020.
Governor Newsom’s statewide stay-at-home order These second-round loans were also eligible for
and various other state and local directives that forgiveness. In California, about 1 million businesses
limited daily activities. These efforts, as well as received about $100 billion in PPP loans from
health concerns, sharply depressed economic both rounds, including $96 billion in forgiven loans
activity across the state, resulting in unprecedented (see Figure 1).
job losses and major financial challenges for
businesses of all sizes. In response, the federal and
Figure 1
state governments enacted a variety of policies and
programs to aid businesses, including grants, loans, Federal Assistance to Businesses in
and tax relief. California in Response to COVID-19
Federal Business Relief Provided Mainly (In Billions)
Through the Paycheck Protection Program (PPP).
The single largest business assistance program Paycheck Protection Program
Total loans $101.7
during the pandemic was PPP, a forgivable loan
Loans forgiven 96.4
program created in March 2020. This program Restaurant Revitalization Fund 5.7
provided funding for eligible businesses to borrow Shuttered Venue Operators Grants 2.4
money from private lenders. If the businesses met Economic Injury Disaster Loan Advance Grants 2.7
certain conditions, such as maintaining specified
employment and compensation levels, they could
apply to the federal Small Business Administration Federal Government Also Provided Additional
(SBA) to have those loans forgiven. The federal Targeted Programs. In addition to PPP, the
government fully covered the costs of these federal government provided additional, targeted
forgiven loans. In authorizing legislation, Congress aid to businesses in industries highly impacted by
expressed its intent that SBA should prioritize COVID-19. These programs included:
businesses in underserved and rural markets, 1. Restaurant Revitalization Fund (RRF).
including to veterans and businesses owned by Created in March 2021, the RRF provided
economically disadvantaged individuals, women, grants to eligible restaurants, caterers, and
and businesses in operation for less than two years. bars that experienced a decline in revenue
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during the pandemic. RRF grants provided Senate Bill 113 also excluded businesses’
restaurants with up to $10 million in lost grants from the RRF and SVOG programs from
revenues, but no more than $5 million per taxable income.
physical location. California restaurants State Provided Grants to Small Businesses.
received nearly $6 billion from the In addition to the federal programs and state tax
RRF program. relief on that assistance, the state provided its own
2. Shuttered Venue Operators Grant assistance to businesses in response to COVID-19.
(SVOG). Created in December 2020, The largest of the state programs was the California
SVOG provided grants to eligible theatres; Small Business COVID-19 Relief Grant (SBCRG)
performing arts organizations; and other program, administered through the Governor’s
cultural institutions, such as museums, Office of Business and Economic Development
zoos, and aquariums. Eligible applicants (Go-Biz). Grant applications and disbursements
could qualify for grants that replaced up to were administered by Lendistry, a private company
45 percent of their gross earned revenue and small business lender. Through this program,
with a maximum award of $10 million. the state provided grants between $5,000 and
California venues received about $2 billion $25,000 to eligible small businesses and nonprofits
in SVOG grants. impacted by COVID-19, depending on their annual
3. Economic Injury Disaster Loan (EIDL) gross revenue. To be eligible, businesses needed
Advance Grants. Before the onset of to meet a variety of criteria, including having: a
the pandemic, through the preexisting physical presence in the state, less than $5 million
EIDL program, the SBA made disaster loans in annual gross revenue, and being in operation
to small businesses. In March 2020, Congress since at least June 2019. In total, the state provided
created a new program to advance $10,000 about $3.7 billion in grants through to this program.
to qualified small business that applied for State Also Provided Additional Targeted
an EIDL related to the COVID-19 pandemic. Grants. In addition to SBCRG, the state also
The advances did not need to be repaid, provided a variety of other, smaller, grant programs
regardless of whether the businesses were for businesses and nonprofits in response to
eventually approved for a loan. California COVID-19. Similar to the federal programs, some of
businesses received nearly $3 billion in these were targeted toward specific industries and
pandemic-related EIDL advance grants. business types. They are described in the nearby
State Tax Relief Extended to the Various box. (The box does not include state loan programs
Federal Programs. Typically, federal and state and/or other tax relief, such as the Main Street tax
tax laws would treat grants and forgiven loans credit. These programs are not included in this
as taxable business income. In response to the analysis because we do not have business or zip
pandemic, however, Congress changed federal code-level data for them.)
laws to exclude the above pandemic-related We Did Not Have Direct Data on Tax Relief
business assistance programs from taxable on Federal Programs. The remainder of this
income. The state partially conformed to this report analyzes the distribution of state tax relief
federal treatment. Specifically, Chapter 39 of associated with federal PPP loans and other grant
2020 (AB 1577, Burke) and Chapter 17 of 2021 programs, as well as the SBCRG program. We
(AB 80, Burke) partially conformed state tax laws have business-level data on SBCRG, but do not
to the federal treatment of forgiven PPP loans have direct sources of data on tax relief because
and EIDL advance grants. Taxpayers that were businesses’ tax filings do not include information on
publicly traded companies or did not have at excluded income. Instead, we have used SBA data
least a 25 percent reduction in gross receipts on PPP as a proxy for the businesses that would be
were excluded from this provision. Assembly eligible for tax relief on federal grants and forgiven
Bill 194 extended the state’s tax treatment to loan loans. In particular, businesses were eligible for
amounts forgiven under the second round of PPP. state tax relief on forgiven loans if they had at least
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a 25 percent reduction in gross receipts—and that As a result, throughout this report, for all federal
was the same requirement for eligibility for the programs, we report figures in terms of total loans
second round of PPP. Therefore, as an indicator of and grants provided to businesses in California, not
which businesses received PPP-related tax relief, the specific amount of tax relief.
we use data on California businesses that received
loan forgiveness on exactly two rounds of PPP.
Other State Grants
California Venues Grant Program. Under this program, the state provided a total of
roughly $150 million in competitive grants to support eligible independent live events venues
and $15 million to support independent theaters. The maximum award to each venue was the
lesser of $250,000 or 20 percent of the venue’s gross earned revenue. Funds were distributed
through Lendistry.
California Microbusiness COVID-19 Relief Grant Program. Under this program, the state
provided a total of $50 million in grants to eligible microbusinesses distributed to each county
according to its population. The maximum award for each microbusiness was $2,500. Funds were
distributed through county government agencies and a consortium of nonprofits.
California Nonprofit Performing Arts Grant Program. Through this program, the state
provided roughly $40 million in grants to nonprofit performing arts organizations, including:
theater companies and dinner theaters, dance companies, musical groups and artists, and
other performing arts companies. To qualify, the performing arts organization needed to be a
registered nonprofit and have no more than $2 million in annual gross revenue. Grant amounts to
each organization ranged from $25,000 to $75,000 based on annual gross revenue. Funds were
distributed through Lendistry.
California Dream Fund. Under this program, the state provided a total of roughly $30 million
in grants to seed entrepreneurship and small business creation. New entrepreneurs and
small-business owners completed a training program through select participating centers of
the Technical Assistance Expansion Program. Following successful completion of the program,
new businesses were eligible to apply for the microgrant, up to $10,000. Funds were distributed
through Lendistry.
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WHAT TYPES OF INDUSTRIES
RECEIVED MORE ASSISTANCE?
This section describes the types
of industries that received more
Figure 2
state tax relief associated with
PPP loans and other federal grants
State Small Business Grants by Industry
and SBCRG.
(In Millions)
Most State Grants Went
to Businesses in Health,
Health Dentists
Accommodation, and
Accommodation Restaurants
Professional/Technical Services.
Professional/Technical Lawyers
Figure 2 shows the distribution
Retail Trade Used Car Dealers
of SBCRG by industry. As the
Personal Care Services Beauty Salons
figure shows, most grants went
Transportation Taxi and Rideshares
to businesses in the following
Construction Residential Remodelers
industries: health; accommodation
Other Services
(mostly restaurants); and
Manufacturing
professional/technical, which
Arts Artists, Writers, and Performers
includes lawyers, accountants, Wholesale Trade
and engineers. Real Estate Real Estate Agents and Brokers
Most PPP-Related Tax Administration Janitorial Services
Relief Went to Businesses in Education
Accommodation, Manufacturing, Finance/Insurance
and Construction. Figure 3 Information Motion Picture and Video Production
shows the distribution of PPP Management
loans eligible for state tax relief 100 200 300 400 $500
by industry. As the figure shows,
most of these forgiven loans went
to businesses in the following
industries: accommodation (mostly
restaurants), manufacturing, and construction. types of assistance went to industries with more
job losses. (This relationship appears to be driven
State Assistance Generally Targeted
by more than industry size.) For example, the
Industries With More Job Losses. We examined
accommodation and food services industry, in
whether or not industries that received more
particular, was the most highly impacted in job
state assistance were also more impacted by the
loss terms and also received proportionally more
pandemic—as measured by job losses. Figure 4
assistance. Also, for most industries, there appears
shows the share of each industry’s state grants
to be a slightly stronger relationship between state
and PPP loans eligible for tax relief compared to
grants and job losses compared to PPP forgiven
its share of total job losses (measured between
loans and job losses, perhaps indicating the state
February 2020 and April 2020). The figure shows
grants—although much smaller—were slightly better
a positive relationship, meaning more of both
targeted toward the more impacted industries.
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Figure 3
PPP Loans Eligible for State Tax Relief by Industry
(In Millions)
Accommodation Restaurants
Manufacturing Commercial Building Construction
Construction
Professional/Technical Lawyers
Other Services Religious Organizations
Health Dentists Physicians
Retail Trade New Car Dealers
Transportation Taxi and Rideshare
Wholesale Trade
Administration Landscaping Services
Arts
Education Elementary and Secondary Schools
Real Estate
Information Motion Picture and Video Production
Finance/Insurance
Management
400 800 1,200 1,600 $2,000
PPP = Paycheck Protection Program.
Figure 4
Generally, Industries With More Job Losses
Received More State Grants and PPP-Related Tax Relief
20%
18
Professional, Scientific,
16 and Technical Services Accommodation and
Food Services
Share of Total Business Assistance
14
12 Health Care and Social Assistance
Construction
10
Transportation Retail Trade
8 and Utilities
6
State Grants
4 PPP-Related Tax Relief
2
Information
5 10 15 20 25 30 35%
Industry Job Losses (As a Share of Total)
PPP = Paycheck Protection Program.
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WHAT TYPES OF COMMUNITIES
RECEIVED MORE ASSISTANCE?
This Analysis Focuses on Community-Level, relationships to disseminate information about state
Not Business-Level, Impacts. Ideally, and federal programs. These groups expressed that
our analysis would have considered both they were less likely to have existing communication
business- and community-level impacts of state channels with rural businesses and found them to
and federal assistance to California businesses be generally more difficult to reach, in some cases
during the pandemic. However, we do not have due to how diffuse and distributed they are across
detailed data on the demographic and economic large geographical areas. This, in particular, posed
characteristics of business owners for either a challenge for increasing awareness of the state’s
program, which means we must largely focus only grant programs, which were much smaller and less
on community-level impacts. For this analysis, we well-known than federal PPP loans.
use zip codes—the smallest unit of geography Larger Metro Regions Received More
that we have available. In the remainder of this PPP-Related Tax Relief and State Grants.
section, using zip code-level data, we examine a We also examined how PPP eligible for state tax
few different characteristics of the communities relief and SBCRG were distributed across metro
that received more state and federal assistance, area. As Figure 6 on page 10 shows, per business
including: geography, income, and race in the area, larger metro regions tended to receive
and ethnicity. more in both types of assistance, most notably,
Los Angeles, San Francisco, and San Jose.
Urban and Metropolitan Zip Codes Smaller metro areas—like Ukiah, Crescent City,
Urban Zip Codes Received More PPP-Related and Truckee—received much less in both types
Tax Relief and State Grants. Figure 5 shows that, of assistance. One outlier in this trend is Napa,
on a per-business basis, zip codes in metropolitan which received considerably more PPP-related loan
areas received more PPP loans eligible for state forgiveness per business than any other area of
tax relief and SBCRG compared to other types any size. This general finding is also consistent with
of zip codes. (The nearby box provides some our conversations with business groups. Groups
more information on the sources of data and located in larger metro areas expressed they had
definitions supporting this analysis.) In both cases, better established relationships and pre-existing
rural zip codes received the least assistance per methods of communication with businesses in their
businesses. This finding is consistent with some areas. That said, a business group in one large
conversations we had with business groups who metro areas did express some challenges unique
indicated that they used pre-existing networks and to large metros, for example, the need for a broad
range of translation services given the many of
Figure 5 languages used in those metros.
Urban Areas Received More RRF and SVOG Did Not Display as Strong
Assistance Than Rural Areas of a Correlation With Metro Size. We also
examined whether state tax relief associated with
Amount of Loans or Grants Per Establishment
the two other main federal programs—RRF and
PPP Loans SVOG—displayed a correlation with the size of
Forgiven State Grants the metropolitan area in which businesses were
Urban—Metropolitan $97,651 $3,690 located. For these programs, the relationship is
Small Town 96,594 2,668 less clear. Figures 7 on page 11, and Figure 8 on
Urban—Micropolitan 74,984 2,842
page 12, show the amount of restaurant grants
Rural 66,220 2,639
PPP = Paycheck Protection Program.
and shuttered venue grants, respectively, by metro
area (scaled using total businesses in that area).
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Data Sources and Definitions
Geography. We used the U.S. Department of Agriculture’s rural-urban commuting codes to
categorize all zip codes in the state according to whether they are: metropolitan, micropolitan,
small town, or rural. A metropolitan area is an area that has a city with at least 50,000 residents.
A micropolitan area is one that has a city with 10,000 to 50,000 residents. A small town has
more than 2,500 residents but fewer than 10,000 residents. All other areas are considered rural.
We used the Census Bureau’s core-based statistical areas to define zip codes according to major
metro region.
Income. We used data from the 2021 American Community Survey (ACS) to measure median
household income for each zip code. We then placed all California zip codes in one of four
categories: low income (less than or equal to $61,000), medium-low income ($61,001 to $81,000),
medium-high income ($81,001 to $110,000), and high income (greater than $110,000). Statewide,
the median zip code had median household income of nearly $89,000 in 2021.
Race and Ethnicity. We used ACS data to determine the share of residents of each zip code
who are white, Black, Asian, or Hispanic/Latino. We define a zip code as “higher representation”
of a specific race or ethnicity if the zip code is above the 90 th percentile among all other zip codes
in terms of its percentage of that race or ethnicity. Importantly, this does not necessarily mean
the zip codes have majorities of residents with this race or ethnicity. Using this measure, “high
representation white” is defined as zip codes where at least 85 percent of residents are white,
“high representation Hispanic/Latino” is 71 percent, “high representation Black” is 10 percent,
and “high representation Asian” is 28 percent.
Some Northern California metros, including San shows the how much grants in higher-income zip
Francisco, San Jose, Napa, and Salinas received codes exceeded the lowest-income zip codes
disproportionally more restaurant grants while in percent terms. As the figure shows, while
some Southern California metro areas, including middle- and higher-income zip codes received
San Luis Obispo and Los Angeles, received more slightly more in state grants than lower-income zip
shuttered venue grants. codes did, the difference is more pronounced for
federal PPP loans. This suggest the state’s small
Higher-Income Zip Codes business grant program was slightly better targeted
Higher-Income Zip Codes Received toward low-income communities compared to PPP
More Total Assistance. Figure 9 (left side) on and the associated state tax relief.
page 13, shows the total amount of state and
federal assistance by zip code using four income Zip Codes With More
categories. (See the previous box for a description Non-White Residents
of how these categories were defined.) As the More Assistance Went to Zip Codes With
left side of the figure shows, the highest-income Higher Representation of Hispanic/Latino,
zip codes received the most total assistance Black, and Asian Residents. Figure 10 on
from state grants and federal loan forgiveness. page 13 shows how much state and federal
Meanwhile, the lowest-income zip codes received assistance went to zip codes with a higher
the least assistance. representation of different races and ethnicities.
State Grants More Similar Across Zip Codes (The previous box describes how we categorize zip
by Income. That said, state grants were more codes using race and ethnicity data.) As the figure
equally distributed across zip codes by income than shows, zip codes with higher representations of
federal PPP loans were, particularly those eligible non-white residents all received more assistance
for state tax relief. Figure 9 (right side) on page 13, than the statewide average, while zip codes with a
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Figure 6
Larger Metro Areas Received More PPP-Related Tax Relief and State Grants
$4,500
Merced San Jose-Sunnyvale-Santa Clara
State Small Business Grants (Per Business in Area)
San Francisco-Oakland-Hayward
$4,000
Los Angeles-Long Beach-Anaheim
Madera
Sacramento-Roseville-Arden Arcade Santa Maria-Santa Barbara
3,500 Napa
Santa Cruz-Watsonville
Riverside-San Bernardino-Ontario
Vallejo-Fairfield Santa Rosa
Eureka-Arcata-Fortuna
Yuba City San Diego-Carlsbad
3,000
Clearlake Chico Visalia-Porterville
El Centro
Crescent City, CA Bakersfield
Sonora
2,500 Other
Red Bluff
Ukiah Hanford-Corcoran
Truckee-Grass Valley
Redding
2,000
40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 $140,000
PPP Loans Forgiven (Per Business in Area)
PPP = Paycheck Protection Program.
higher representation of white residents received Several Plausible Explanations. We have
less. Importantly, this does not speak to the race some plausible explanations for this finding.
or ethnicity of the business owners who received First, zip codes with a higher representation of
the assistance. It should not be interpreted to mean white residents also tend to be disproportionately
that Hispanic/Latino-, Asian-, and Black-owned rural and lower income. These zip codes have
businesses received more assistance than a median income of $79,000, somewhat lower
white-owned businesses. than the statewide average of $89,000, and
This Finding Is Somewhat Surprising. The are nearly 40 percent rural compared to the
finding that more assistance went to zip codes statewide average of 8 percent. As we discussed
with higher representation of non-white residents is earlier, rural and lower-income zip codes tended
somewhat surprising for a couple of reasons. First, to receive less assistance than their urban
zip codes with higher representations of Hispanic/ and higher-income counterparts. Second, zip
Latino and Black residents are, on average, lower codes with higher representation of Black and
income, and we found that more assistance went Hispanic/Latino residents tend to have higher
to higher-income zip codes. Second, as described shares of service-oriented industries. As we
below, there has been other research documenting discussed earlier, those industries were the most
racial disparities in PPP loans among business highly impacted by the pandemic and also tended
owners, particularly that Black business owners to receive more state and federal assistance.
received fewer PPP loans compared to white Statewide, about 27 percent of businesses are
businesses owners. either in accommodation, retail, and personal care
and other services. In zip codes that have a higher
representation of Black residents, 32 percent
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of businesses are in these
Figure 7
service-oriented industries. The
figure is 35 percent for zip codes
Restaurant Revitalization Fund Grants by
that have a higher representation
Metro Area in California
of Hispanic/Latino residents.
Amount of Grant Per Business in Metro Area
Statewide Lendistry Data
on Business Owner Race and
San Francisco-Oakland-
Ethnicity. Although we were Hayward
not able to obtain data from San Jose-Sunnyvale-Santa Clara
Lendistry on the demographic Napa
characteristics of the businesses Salinas
Los Angeles-Long Beach-
owners who received SBCRG Anaheim
Santa Cruz-Watsonville
at a business level, they have
San Diego-Carlsbad
shared statewide demographic
Santa Rosa
data. Lendistry reported that,
Santa Maria-Santa Barbara
statewide, about half of the San Luis Obispo-Paso Robles-
Arroyo Grande
small business COVID-19 grants
El Centro
were distributed to white-owned Sacramento-Roseville-
Arden Arcade
businesses, 32 percent of the Riverside-San Bernardino-Ontario
grants went to Asian-owned Chico
businesses, 18 percent went Sonora
to Hispanic- or Latino-owned Vallejo-Fairfield
businesses (regardless of race), Merced
and 11 percent went to African Oxnard-Thousand Oaks-
Ventura
American-owned businesses. Modesto
Lendistry’s method for collecting Fresno
and reporting race and ethnicity Truckee-Grass Valley
data does not appear to align with Eureka-Arcata-Fortuna
Census data on race and ethnicity Visalia-Porterville
Ukiah
in the state. Consequently,
Bakersfield
we cannot directly compare
Stockton-Lodi
these statistics to statewide
Hanford-Corcoran
demographic data.
Crescent City
Other Research on Federal Yuba City
PPP Program Has Documented Madera
Racial Disparities Among Redding
Business Owners. Research Clearlake
nationally and in other states has Susanville
found consistent evidence of Red Bluff
racial disparities in the distribution 2,000 4,000 6,000 8,000 10,000 $12,000
of PPP loans, particularly for
Black-owned businesses. These
findings include, for example, that
Black-owned firms were about data limitations, we were unable to examine state
9 percent less likely to receive PPP loans than and federal aid in California at a business level in
similar white-owned firms and, among Black-owned this report. We are not aware of any high-quality
businesses that received loans, those loans were studies on loan distribution in California that
approximately 50 percent smaller than those loans documented the presence—or lack thereof—of
made to similar white-owned businesses. Due to racial disparities at a community level.
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Figure 8
Shuttered Venue Operators Grants by Metro Area in California
Amount of Grants Per Business in Metro Area
Santa Rosa
San Luis Obispo-Paso Robles-
Arroyo Grande
Los Angeles-Long Beach-Anaheim
San Francisco-Oakland-Hayward
Salinas
Santa Maria-Santa Barbara
San Diego-Carlsbad
Napa
Modesto
Santa Cruz-Watsonville
Truckee-Grass Valley
Oxnard-Thousand Oaks-Ventura
Bakersfield
Sonora
Eureka-Arcata-Fortuna
Madera
San Jose-Sunnyvale-Santa Clara
Chico
Fresno
Susanville
Sacramento-Roseville-Arden Arcade
Redding
Riverside-San Bernardino-Ontario
Ukiah
Red Bluff
Merced
Vallejo-Fairfield
Visalia-Porterville
Crescent City
Stockton-Lodi
Clearlake
El Centro
Yuba City
Hanford-Corcoran
1,000 2,000 3,000 4,000 $5,000
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Figure 9
Higher-Income Zip Codes Received More Total State and Federal Assistance
(In Billions)
But State Grants Were More Equally Distributed
Statewide Average
$100 Percent Difference Relative to Lowest-Income Zip Code
30%
50 20
10 110K+
>61K 61K-81K 81K-110K 110K+ >61K 61K-81K 81K-110K
State Assistanceª PPP Loans Eligible for State Tax Relief b All Other PPP Loans
a
Includes small business and nonprofit grants, venues grants, and performing arts grants.
b
Payment Protection Program forgiven for businesses that received exactly two rounds of loans, restaurant grants, and shuttered venues grants.
Figure 10
Zip Codes With More Non-White Residents
Received More Total Assistance
Mean Amount Per Establishment by High Representation Zip Codes
$140,000
100,000
60,000
20,000
Hispanic/Latino Black Asian Statewide White
Average
State Assistancea PPP Loans Eligible for State Tax Relief b Other PPP Loans
"High representation" indicates that the zip code is in the 90th percentile statewide in terms of its share of the
identified race or ethnicity.
a
Includes small business and nonprofit grants, venues grants, performing arts grants.
b
PPP loans forgiven for businesses that received exactly two PPP rounds, plus restaurant grants and shuttered
venues grants.
PPP = Paycheck Protection Program.
www.lao.ca.gov 13
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FINDINGS
Legislature Has Very Little Information About from a state budget perspective. The relative size
Recipients of State Grants. Ideally, this report differences between the state and federal programs
would have included a business-level analysis on also likely contributed to a lack of broad awareness
the recipients of pandemic-related assistance, about the state’s grants. In our interviews with
particularly for the state’s grant programs. However, business groups, we observed that there seemed to
Go-Biz was unable to provide us with business-level be a very limited awareness of state programs, even
demographic data on grant recipients. (We among some regional Chambers of Commerce,
understand that Go-Biz cannot request this data which played a key role in disseminating information
from Lendistry because it was not part of the to businesses about government assistance.
original contract with the entity.) With better data, That said, this apparent lack of awareness did not
we would have been better positioned to analyze prevent the state from disseminating nearly all of
whether there were racial and ethnic, gender, or the assistance appropriated by the Legislature.
other disparities in the state’s programs. In the State Assistance Complemented Federal
future, we would suggest the Legislature consider Assistance in Some Ways, Duplicated It in
directing the administration to include reporting Others. Through this analysis, we have some
requirements on demographics in its contracts with evidence the state programs did, to some extent,
private firms and standardizing questions about complement, rather than duplicate, federal
race and ethnicity to align with Census data. This assistance. For example, we found that there was
could be particularly useful in cases where the somewhat more dissemination of state assistance
Legislature is interested in targeting assistance, among industries that experienced more job losses
especially to address a potential disparity. compared to federal assistance. State assistance
State Business Assistance Was Significant was also more equally distributed across zip
to the State Budget, but Dwarfed by Federal codes by income compared to federal assistance.
PPP Program. As we discussed in this report, Geographically, however, both state and federal
state assistance to businesses represented a very assistance appeared to have better dispersion in
small share of the overall assistance provided urban and large metropolitan areas and less in rural
to businesses during the pandemic because areas and small cities. In light of these disparities,
federal aid was so significant. Nonetheless, the the state programs could have been better targeted
state grants—with program costs totaling roughly to rural Californians in order to partially mitigate a
$4.5 billion across all programs—were not trivial weakness of the federal program.
14 L E G I S L AT I V E A N A LY S T ’ S O F F I C E
AN LAO REPORT
www.lao.ca.gov 15
AN LAO REPORT
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This report was prepared by Ann Hollingshead, and reviewed by Brian Uhler and Carolyn Chu. The Legislative
Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature.
To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are
available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento,
California 95814.
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