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2024-25 BUDGET
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GABRIEL PETEK | LEGISLATIVE ANALYST
JANUARY 2024
State Assistance to Businesses
in Response to COVID-19
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INTRODUCTION
This report provides an analysis of state
assistance given to businesses in response
to COVID-19. The first section of this report
includes background information on the state and
federal programs that provided both broad and
targeted relief to businesses. The second section
describes the industries that received the most
public assistance. The third section describes the
types of communities, defined using zip codes,
that received more state and federal assistance.
Thereport concludes with some findings and
comments for the Legislature. This report fulfills
our statutory requirements under Section 16 of
Chapter55 of 2022 (AB194, Committee on Budget)
and Section22 of Chapter3 of 2022 (SB113,
Committee on Budget and Fiscal Review).
WHAT ASSISTANCE DID THE STATE AND FEDERAL
GOVERNMENTS PROVIDE?
Pandemic Had Significant Economic Impacts.
In early 2020, in response to the onset of the
COVID-19 pandemic, state and local officials took
steps to limit the spread of the disease. This included
Governor Newsom’s statewide stay-at-home order
and various other state and local directives that
limited daily activities. Theseefforts, as well as
health concerns, sharply depressed economic
activity across the state, resulting in unprecedented
job losses and major financial challenges for
businesses of all sizes. In response, the federal and
state governments enacted a variety of policies and
programs to aid businesses, including grants, loans,
and tax relief.
Federal Business Relief Provided Mainly
Through the Paycheck Protection Program (PPP).
The single largest business assistance program
during the pandemic was PPP, a forgivable loan
program created in March2020. This program
provided funding for eligible businesses to borrow
money from private lenders. If the businesses met
certain conditions, such as maintaining specified
employment and compensation levels, they could
apply to the federal Small Business Administration
(SBA) to have those loans forgiven. The federal
government fully covered the costs of these
forgiven loans. In authorizing legislation, Congress
expressed its intent that SBA should prioritize
businesses in underserved and rural markets,
including to veterans and businesses owned by
economically disadvantaged individuals, women,
and businesses in operation for less than two years.
Later in 2020, the federal government provided a
second round of PPP loans to businesses that had
no more than 300 employees and a 25percent
reduction in gross receipts between 2019 and 2020.
These second-round loans were also eligible for
forgiveness. In California, about 1million businesses
received about $100billion in PPP loans from
both rounds, including $96billion in forgiven loans
(seeFigure 1).
Federal Government Also Provided Additional
Targeted Programs. In addition to PPP, the
federal government provided additional, targeted
aid to businesses in industries highly impacted by
COVID-19. These programs included:
1. Restaurant Revitalization Fund (RRF).
Created in March2021, the RRF provided
grants to eligible restaurants, caterers, and
bars that experienced a decline in revenue
Figure 1
Federal Assistance to Businesses in
California in Response to COVID-19
(In Billions)
Paycheck Protection Program
Total loans $101.7
Loans forgiven 96.4
Restaurant Revitalization Fund 5.7
Shuttered Venue Operators Grants 2.4
Economic Injury Disaster Loan Advance Grants 2.7
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during the pandemic. RRF grants provided
restaurants with up to $10million in lost
revenues, but no more than $5million per
physical location. California restaurants
received nearly $6billion from the
RRFprogram.
2. Shuttered Venue Operators Grant
(SVOG).Created in December 2020,
SVOG provided grants to eligible theatres;
performing arts organizations; and other
cultural institutions, such as museums,
zoos, and aquariums. Eligible applicants
could qualify for grants that replaced up to
45percent of their gross earned revenue
with a maximum award of $10million.
California venues received about $2billion
inSVOGgrants.
3. Economic Injury Disaster Loan (EIDL)
Advance Grants.Before the onset of
the pandemic, through the preexisting
EIDLprogram, the SBA made disaster loans
to small businesses. In March2020, Congress
created anew program to advance $10,000
to qualified small business that applied for
an EIDL related to the COVID-19 pandemic.
The advances did not need to be repaid,
regardless of whether the businesses were
eventually approved for a loan. California
businesses received nearly $3billion in
pandemic-related EIDL advancegrants.
State Tax Relief Extended to the Various
Federal Programs. Typically, federal and state
tax laws would treat grants and forgiven loans
as taxable business income. In response to the
pandemic, however, Congress changed federal
laws to exclude the above pandemic-related
business assistance programs from taxable
income. The state partially conformed to this
federal treatment. Specifically, Chapter39 of
2020 (AB1577, Burke) and Chapter17 of 2021
(AB80, Burke) partially conformed state tax laws
to the federal treatment of forgiven PPP loans
and EIDL advance grants. Taxpayers that were
publicly traded companies or did not have at
least a 25percent reduction in gross receipts
were excluded from this provision. Assembly
Bill194 extended the state’s tax treatment to loan
amounts forgiven under the second roundofPPP.
SenateBill113 also excluded businesses’
grants from the RRF and SVOG programs from
taxableincome.
State Provided Grants to Small Businesses.
In addition to the federal programs and state tax
relief on that assistance, the state provided its own
assistance to businesses in response to COVID-19.
The largest of the state programs was the California
Small Business COVID-19 Relief Grant (SBCRG)
program, administered through the Governor’s
Office of Business and Economic Development
(Go-Biz). Grant applications and disbursements
were administered by Lendistry, a private company
and small business lender. Through this program,
the state provided grants between $5,000 and
$25,000 to eligible small businesses and nonprofits
impacted by COVID-19, depending on their annual
gross revenue. To be eligible, businesses needed
to meet a variety of criteria, including having: a
physical presence in the state, less than $5million
in annual gross revenue, and being in operation
since at least June 2019. In total, the state provided
about $3.7billion in grants through to this program.
State Also Provided Additional Targeted
Grants. In addition to SBCRG, the state also
provided a variety of other, smaller, grant programs
for businesses and nonprofits in response to
COVID-19. Similar to the federal programs, some of
these were targeted toward specific industries and
business types. They are described in the nearby
box. (The box does not include state loan programs
and/or other tax relief, such as the Main Street tax
credit. These programs are not included in this
analysis because we do not have business or zip
code-level data for them.)
We Did Not Have Direct Data on Tax Relief
on Federal Programs. The remainder of this
report analyzes the distribution of state tax relief
associated with federal PPP loans and other grant
programs, as well as the SBCRG program. We
have business-level data on SBCRG, but do not
have direct sources of data on tax relief because
businesses’ tax filings do not include information on
excluded income. Instead, we have used SBA data
on PPP as a proxy for the businesses that would be
eligible for tax relief on federal grants and forgiven
loans. Inparticular, businesses were eligible for
state tax relief on forgiven loans if they had at least
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a 25percent reduction in gross receipts—and that
was the same requirement for eligibility for the
second round of PPP. Therefore, as an indicator of
which businesses received PPP-related tax relief,
we use data on California businesses that received
loan forgiveness on exactly two rounds of PPP.
As a result, throughout this report, for all federal
programs, we report figures in terms of total loans
and grants provided to businesses in California, not
the specific amount oftax relief.
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
state tax relief associated with
PPP loans and other federal grants
andSBCRG.
Most State Grants Went
to Businesses in Health,
Accommodation, and
Professional/Technical Services.
Figure 2 shows the distribution
of SBCRG by industry. As the
figure shows, most grants went
to businesses in the following
industries: health; accommodation
(mostly restaurants); and
professional/technical, which
includes lawyers, accountants,
andengineers.
Most PPP-Related Tax
Relief Went to Businesses in
Accommodation, Manufacturing,
and Construction. Figure 3
shows the distribution of PPP
loans eligible for state tax relief
by industry. As the figure shows,
most of these forgiven loans went
to businesses in the following
industries: accommodation (mostly
restaurants), manufacturing, and construction.
State Assistance Generally Targeted
Industries With More Job Losses. We examined
whether or not industries that received more
state assistance were also more impacted by the
pandemic—as measured by job losses. Figure 4
shows the share of each industry’s state grants
and PPP loans eligible for tax relief compared to
its share of total job losses (measured between
February 2020 and April 2020). The figure shows
a positive relationship, meaning more of both
types of assistance went to industries with more
job losses. (This relationship appears to be driven
by more than industry size.) For example, the
accommodation and food services industry, in
particular, was the most highly impacted in job
loss terms and also received proportionally more
assistance. Also, for most industries, there appears
to be a slightly stronger relationship between state
grants and job losses compared to PPP forgiven
loans and job losses, perhaps indicating the state
grants—although much smaller—were slightly better
targeted toward the more impacted industries.
Figure 2
State Small Business Grants by Industry
(In Millions)
Management
Information
Finance/Insurance
Education
Administration
Real Estate
Wholesale Trade
Manufacturing
Other Services
Construction
Transportation
Personal Care Services
Retail Trade
Professional/Technical
Accommodation
Health
Arts
Motion Picture and Video Production
Janitorial Services
Real Estate Agents and Brokers
Artists, Writers, and Performers
Residential Remodelers
Taxi and Rideshares
Beauty Salons
Used Car Dealers
Lawyers
Restauran
ts
Dentists
100 200 300 400 $500
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PPP = Paycheck Protection Program.
Figure 3
PPP Loans Eligible for State Tax Relief by Industry
(In Millions)
Motion Picture and Video Production
Elementary and Secondary Schools
Landscaping Services
Taxi and Rideshare
New Car Dealers
Dentists
Religious Organizations
Lawyers
Commercial Building Construction
Restaurants
Physicians
400 800 1,200 1,600 $2,000
Management
Finance/Insurance
Information
Real Estate
Education
Arts
Administration
Wholesale Trade
Transportation
Retail Trade
Health
Other Services
Professional/Technical
Construction
Manufacturing
Accommodation
PPP = Paycheck Protection Program.
Figure 4
Generally, Industries With More Job Losses
Received More State Grants and PPP-Related Tax Relief
Accommodation and
Food Services
Construction
Health Care and Social Assistance
Information
Professional, Scientific,
and Technical Services
Retail Trade
Transportation
and Utilities
2
4
6
8
10
12
14
16
18
20%
5 10 15 20 25 30 35%
Industry Job Losses (As a Share of Total)
Share of Total Business Assistance
State Grants
PPP-Related Tax Relief
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WHAT TYPES OF COMMUNITIES
RECEIVEDMOREASSISTANCE?
This Analysis Focuses on Community-Level,
Not Business-Level, Impacts. Ideally,
our analysiswould have considered both
business- andcommunity-level impacts of state
and federal assistance to California businesses
during the pandemic. However, we do not have
detailed data on the demographic and economic
characteristics of business owners for either
program, which means we must largely focus only
on community-level impacts. For this analysis, we
use zip codes—the smallest unit of geography
that we have available. In the remainder of this
section, using zip code-level data, we examine a
few different characteristics of the communities
that received more state and federal assistance,
including: geography, income, and race
andethnicity.
Urban and Metropolitan Zip Codes
Urban Zip Codes Received More PPP-Related
Tax Relief and State Grants. Figure5 shows that,
on a per-business basis, zip codes in metropolitan
areas received more PPP loans eligible for state
tax relief and SBCRG compared to other types
of zip codes. (The nearby box provides some
more information on the sources of data and
definitions supporting this analysis.) In both cases,
rural zip codes received the least assistance per
businesses. This finding is consistent with some
conversations we had with business groups who
indicated that they used pre-existing networks and
relationships to disseminate information about state
and federal programs. These groups expressed that
they were less likely to have existing communication
channels with rural businesses and found them to
be generally more difficult to reach, in some cases
due to how diffuse and distributed they are across
large geographical areas. This, in particular, posed
a challenge for increasing awareness of the state’s
grant programs, which were much smaller and less
well-known than federal PPP loans.
Larger Metro Regions Received More
PPP-Related Tax Relief and State Grants.
Wealso examined how PPP eligible for state tax
relief and SBCRG were distributed across metro
area. As Figure 6 on page 10 shows, per business
in the area, larger metro regions tended to receive
more in both types of assistance, most notably,
Los Angeles, SanFrancisco, and San Jose.
Smaller metro areas—like Ukiah, Crescent City,
and Truckee—received much less in both types
of assistance. One outlier in this trend is Napa,
which received considerably more PPP-related loan
forgiveness per business than any other area of
any size. This general finding is also consistent with
our conversations with business groups. Groups
located in larger metro areas expressed they had
better established relationships and pre-existing
methods of communication with businesses in their
areas. That said, a business group in one large
metro areas did express some challenges unique
to large metros, for example, the need for a broad
range of translation services given the many of
languages used in those metros.
RRF and SVOG Did Not Display as Strong
of a Correlation With Metro Size. We also
examined whether state tax relief associated with
the two other main federal programs—RRF and
SVOG—displayed a correlation with the size of
the metropolitan area in which businesses were
located. For these programs, the relationship is
less clear. Figures 7 on page 11, and Figure 8 on
page 12, show the amount of restaurant grants
and shuttered venue grants, respectively, by metro
area (scaled using total businesses in that area).
Figure 5
Urban Areas Received More
Assistance Than Rural Areas
Amount of Loans or Grants Per Establishment
PPP Loans
Forgiven State Grants
Urban—Metropolitan $ 97, 6 51 $3,690
Small Town 96,594 2,668
Urban—Micropolitan 74,984 2,842
Rural 66,220 2,639
PPP = Paycheck Protection Program.
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Some Northern California metros, including San
Francisco, San Jose, Napa, and Salinas received
disproportionally more restaurant grants while
some Southern California metro areas, including
San Luis Obispo and Los Angeles, received more
shuttered venue grants.
Higher-Income Zip Codes
Higher-Income Zip Codes Received
More Total Assistance. Figure 9 (left side) on
page13, shows the total amount of state and
federal assistance by zip code using four income
categories. (See the previous box for a description
of how these categories were defined.) As the
left side of the figure shows, the highest-income
zip codes received the most total assistance
from state grants and federal loan forgiveness.
Meanwhile, the lowest-income zip codes received
the leastassistance.
State Grants More Similar Across Zip Codes
by Income. That said, state grants were more
equally distributed across zip codes by income than
federal PPP loans were, particularly those eligible
for state tax relief. Figure 9 (right side) on page13,
shows the how much grants in higher-income zip
codes exceeded the lowest-income zip codes
in percentterms. As the figure shows, while
middle- and higher-income zip codes received
slightly more in state grants than lower-income zip
codes did, the difference is more pronounced for
federal PPP loans. This suggest the state’s small
business grant program was slightly better targeted
toward low-income communities compared to PPP
and the associated state tax relief.
Zip Codes With More
Non-WhiteResidents
More Assistance Went to Zip Codes With
Higher Representation of Hispanic/Latino,
Black, and Asian Residents. Figure 10 on
page13 shows how much state and federal
assistance went to zip codes with a higher
representation of different races and ethnicities.
(The previous box describes how we categorize zip
codes using race and ethnicity data.) As the figure
shows, zip codes with higher representations of
non-white residents all received more assistance
than the statewide average, while zip codes with a
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.
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higher representation of white residents received
less. Importantly, this does not speak to the race
or ethnicity of the business owners who received
the assistance. It should not be interpreted to mean
that Hispanic/Latino-, Asian-, and Black-owned
businesses received more assistance than
white-owned businesses.
This Finding Is Somewhat Surprising. The
finding that more assistance went to zip codes
with higher representation of non-white residents is
somewhat surprising for a couple of reasons. First,
zip codes with higher representations of Hispanic/
Latino and Black residents are, on average, lower
income, and we found that more assistance went
to higher-income zip codes. Second, as described
below, there has been other research documenting
racial disparities in PPP loans among business
owners, particularly that Black business owners
received fewer PPP loans compared to white
businesses owners.
Several Plausible Explanations. We have
some plausible explanations for this finding.
First, zip codes with a higher representation of
white residents also tend to be disproportionately
rural and lower income. These zip codes have
a median income of $79,000, somewhat lower
than the statewide average of $89,000, and
are nearly 40percent rural compared to the
statewide average of 8percent. As we discussed
earlier, rural and lower-income zip codes tended
to receive less assistance than their urban
and higher-income counterparts. Second, zip
codeswith higher representation of Black and
Hispanic/Latino residents tend to have higher
shares of service-oriented industries. As we
discussed earlier, those industries were the most
highly impacted by the pandemic and also tended
to receive more state and federal assistance.
Statewide, about 27percent of businesses are
either in accommodation, retail, and personal care
and other services. In zip codes that have a higher
representation of Black residents, 32percent
PPP = Paycheck Protection Program.
Figure 6
Larger Metro Areas Received More PPP-Related Tax Relief and State Grants
Merced
San Jose-Sunnyvale-Santa Clara
San Francisco-Oakland-Hayward
Los Angeles-Long Beach-Anaheim
Madera
Santa Cruz-Watsonville
Napa
Santa Maria-Santa Barbara
Sacramento-Roseville-Arden Arcade
Riverside-San Bernardino-Ontario
Vallejo-Fairfield
Santa Rosa
San Diego-Carlsbad
Clearlake
Chico
Yuba City
Bakersfield
El Centro
Crescent City, CA
Sonora
Other
Red Bluff
Truckee-Grass Valley
Ukiah
Hanford-Corcoran
Redding
2,000
2,500
3,000
3,500
$4,000
$4,500
40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 1
30,000 $140,000
State Small Business Grants (Per Business in Area)
PPP Loans Forgiven (Per Business in Area)
Eureka-Arcata-Fortuna
Visalia-Porterville
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of businesses are in these
service-oriented industries. The
figure is 35percent for zip codes
that have a higher representation
of Hispanic/Latino residents.
Statewide Lendistry Data
on Business Owner Race and
Ethnicity. Although we were
not able to obtain data from
Lendistry on the demographic
characteristics of the businesses
owners who received SBCRG
at a business level, they have
shared statewide demographic
data. Lendistry reported that,
statewide, about half of the
small business COVID-19 grants
were distributed to white-owned
businesses, 32percent of the
grants went to Asian-owned
businesses, 18percent went
to Hispanic- or Latino-owned
businesses (regardless of race),
and 11percent went to African
American-owned businesses.
Lendistry’s method for collecting
and reporting race and ethnicity
data does not appear to align with
Census data on race and ethnicity
in the state. Consequently,
we cannot directly compare
these statistics to statewide
demographic data.
Other Research on Federal
PPP Program Has Documented
Racial Disparities Among
Business Owners. Research
nationally and in other states has
found consistent evidence of
racial disparities in the distribution
of PPP loans, particularly for
Black-owned businesses. These
findings include, for example, that
Black-owned firms were about
9percent less likely to receive PPP loans than
similar white-owned firms and, among Black-owned
businesses that received loans, those loans were
approximately 50percent smaller than those loans
made to similar white-owned businesses. Due to
data limitations, we were unable to examine state
and federal aid in California at a business level in
this report. We are not aware of any high-quality
studies on loan distribution in California that
documented the presence—or lack thereof—of
racial disparities at a community level.
Figure 7
Restaurant Revitalization Fund Grants by
Metro Area in California
Amount of Grant Per Business in Metro Area
2,000 4,000 6,000 8,000 10,000 $12,000
Red Bluff
Susanville
Clearlake
Redding
Madera
Yuba City
Crescent City
Hanford-Corcoran
Stockton-Lodi
Bakersfield
Ukiah
Visalia-Porterville
Eureka-Arcata-Fortuna
Truckee-Grass Valley
Fresno
Modesto
Oxnard-Thousand Oaks-
Ventura
Merced
Vallejo-Fairfield
Sonora
Chico
Riverside-San Bernardino-Ontario
Sacramento-Roseville-
Arden Arcade
El Centro
San Luis Obispo-Paso Robles-
Arroyo Grande
Santa Maria-Santa Barbara
Santa Rosa
San D
iego-Carlsbad
Santa Cruz-Watsonville
Los Angeles-Long Beach-
Anaheim
Salinas
Napa
San Jose-Sunnyvale-Santa Clara
San Francisco-Oakland-
Hayward
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Figure 8
Shuttered Venue Operators Grants by Metro Area in California
Amount of Grants Per Business in Metro Area
1,000 2,000 3,000 4,000 $5,000
Hanford-Corcoran
Yuba City
El Centro
Clearlake
Stockton-Lodi
Crescent City
Visalia-Porterville
Vallejo-Fairfield
Merced
Red Bluff
Ukiah
Riverside-San Bernardino-Ontario
Redding
Sacramento-Roseville-Arden Arcade
Susanville
Fresno
Chico
San Jose-Sunnyvale-Santa Clara
Madera
Eureka-Arcata-Fortuna
Sonora
Bakersfield
Oxnard-Thousand Oaks-Ventura
Truckee-Grass Valley
Santa Cruz-Watsonville
Modesto
N
apa
San Diego-Carlsbad
Santa Maria-Santa Barbara
Salinas
San Francisco-Oakland-Hayward
Los Angeles-Long Beach-Anaheim
San Luis Obispo-Paso Robles-
Arroyo Grande
Santa Rosa
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10
20
30%
>61K 61K-81K 81K-110K
110K+
a
Includes small business and nonprofit grants, venues grants, and performing arts grants.
Figure 9
Higher-Income Zip Codes Received More Total State and Federal Assistance
(In Billions)
b
Payment Protection Program forgiven for businesses that received exactly two rounds of loans, restaurant grants, and shuttered venues grants.
Statewide Average
50
$100
>61K 61K-81K 81K-110K 110K+
State Assistanceª PPP Loans Eligible for State Tax Relief
b
All Other PPP Loans
But State Grants Were More Equally Distributed
Percent Difference Relative to Lowest-Income Zip Code
"High representation" indicates that the zip code is in the 90
th
percentile statewide in terms of its share of the
identified race or ethnicity.
Figure 10
Zip Codes With More Non-White Residents
Received More Total Assistance
Mean Amount Per Establishment by High Representation Zip Codes
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.
20,000
60,000
100,000
$140,000
Statewide
Average
WhiteHispanic/Latino Black Asian
Other PPP LoansPPP Loans Eligible for State Tax Relief
b
State Assistance
a
PPP = Paycheck Protection Program.
LEGISLATIVE ANALYST’S OFFICE
AN LAO REPORT
14
FINDINGS
Legislature Has Very Little Information About
Recipients of State Grants. Ideally, this report
would have included a business-level analysis on
the recipients of pandemic-related assistance,
particularly for the state’s grant programs. However,
Go-Biz was unable to provide us with business-level
demographic data on grant recipients. (We
understand that Go-Biz cannot request this data
from Lendistry because it was not part of the
original contract with the entity.) With better data,
we would have been better positioned to analyze
whether there were racial and ethnic, gender, or
other disparities in the state’s programs. In the
future, we would suggest the Legislature consider
directing the administration to include reporting
requirements on demographics in its contracts with
private firms and standardizing questions about
race and ethnicity to align with Census data. This
could be particularly useful in cases where the
Legislature is interested in targeting assistance,
especially to address a potential disparity.
State Business Assistance Was Significant
to the State Budget, but Dwarfed by Federal
PPP Program. As we discussed in this report,
state assistance to businesses represented a very
small share of the overall assistance provided
to businesses during the pandemic because
federal aid was so significant. Nonetheless, the
state grants—with program costs totaling roughly
$4.5billion across all programs—were not trivial
from a state budget perspective. The relative size
differences between the state and federal programs
also likely contributed to a lack of broad awareness
about the state’s grants. In our interviews with
business groups, we observed that there seemed to
be a very limited awareness of state programs, even
among some regional Chambers of Commerce,
which played a key role in disseminating information
to businesses about government assistance.
That said, this apparent lack of awareness did not
prevent the state from disseminating nearly all of
the assistance appropriated by the Legislature.
State Assistance Complemented Federal
Assistance in Some Ways, Duplicated It in
Others. Through this analysis, we have some
evidence the state programs did, to some extent,
complement, rather than duplicate, federal
assistance. For example, we found that there was
somewhat more dissemination of state assistance
among industries that experienced more job losses
compared to federal assistance. State assistance
was also more equally distributed across zip
codes by income compared to federal assistance.
Geographically, however, both state and federal
assistance appeared to have better dispersion in
urban and large metropolitan areas and less in rural
areas and small cities. In light of these disparities,
the state programs could have been better targeted
to rural Californians in order to partially mitigate a
weakness of the federal program.
www.lao.ca.gov
AN LAO REPORT
15
LEGISLATIVE ANALYST’S OFFICE
AN LAO REPORT
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LAO PUBLICATIONS
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.