January 21, 2021
January 14 – Weekly Update
Two gorillas tested positive for COVID. The big question on everyone’s mind is, will they get the vaccine before the rest of us?
We are almost done with week 1 of #GetFitSD. Haven’t signed up yet? It’s not too late. Register and we can work on our new year’s resolutions together (but separate…with a mask).
Business News
Johnson & Johnson is expected to apply for FDA emergency authorization by the end of the month. After some manufacturing delays, production could catch up to its original targets by March.
Good news for travelers (and those of you lusting after the idea of a “vacation”)! Beginning in March, Japan Airlines will resume nonstop flights from San Diego to Tokyo and in April, Alaska Airlines will offer a daily nonstop flight from San Diego to JFK Airport in New York.
Legislative Update:
Federal:
President Trump was impeached for the second time. With 10 Republicans voting to impeach, it’s the most bipartisan impeachment in U.S. history.
The Paycheck Protection Program reopened on Monday for first-time borrowers and Wednesday for second-time borrowers. If you or your business is interested in applying, contact your lender or local SBDC ASAP!
The stimulus bill included an extension of Employee Retention Credits through June 30, 2021. An employer can claim tax credits for up to 70% of an employee’s wages if they had to suspend operations due to COVID or have gross receipts less than 80% of the gross receipts from the same quarter in 2019. Learn more here.
There’s a move to make the expanded Medicare coverage for telemedicine permanent. While that might have you saying “okay, Captain Obvious”, some have raised concerns around cybersecurity, telehealth infrastructure, and the actual potential cost savings. One thing not up for debate though: telemedicine has surged in popularity and use since COVID.
Last week, jobless claims spiked – reaching over 950,000 according to the Department of Labor.
International:
The temporary restrictions on non-essential travel across shared ports of entry between Canada, the U.S., and Mexico have been extended for an additional thirty days to February 21. In addition, the CDC issued an order requiring travelers entering the U.S. by air to provide proof of a negative COVID-19 test or documentation of having recovered from COVID-19 to the airline before boarding. This order goes into effect on January 26 and applies to all air passengers, 2 years of age or older, including U.S. citizens and legal permanent residents.
The special medical “fast lane” at the San Ysidro Port of Entry was relocated last week to the far-left side of the port traveling northbound. The program, operated by Mexican authorities, was originally created to boost medical tourism and expedite the return of U.S. visitors after receiving medical care in Mexico. The new access is also available for business purposes, and the single-use passes can be acquired through authorized medical offices and chambers of commerce in Baja.
The Department of Homeland Security announced changes to the H-1B nonimmigrant visa program that go into effect on March 9, 2021. Changes include:
- Replacing the random lottery system currently in place to issue the annual quota of 85,000 new visas with a selection system that would favor petitions with higher salary offers.
- All H-1B registrants would first go through the new process to fill the 65,000 standard openings and remaining unselected registrants with advanced US degrees would be run through the 20,000 Master’s Cap allotment, also implementing the wage-based process.
The final rule (above) could be suspended, congressionally overturned, or challenged in federal court before changes are implemented.
Nonimmigrant visa programs, such as the H-1B, support skilled workers, research, and investment while allowing employers to fill gaps in their workforce and remain globally competitive. The Chamber issued a letter to the administration in support of nonimmigrant visa programs.
State:
Last Friday, Governor Newsom announced his budget proposal. The California state Senate and Assembly began consideration of the proposal on Monday. What’s in it?
- $90 billion for schools
- $34 billion in budget reserves
- $1.75 billion for Project Homekey expansions
- $1 billion for wildfire and forest resilience
- $786 for UC and CSU to maintain tuition fees
- $500 million for low-income housing tax credits
- $372 million for vaccine distribution
- $300 million for toxic site cleanup
- $2 billion for schools to return to in-person instruction
- Not included: Expanded investment in child care
The budget proposal also included over $1 billion in funding for job creation and workforce development. This includes expanding the California Competes Tax Credit to $270 million in available tax credits for FY 2020-21 and 2021-22. (Heads up! CalCompetes is open for applications)
The Chamber and coalition partners have submitted a letter requesting legislative relief to bring PPP tax deductibility at the state level in line with the federal level. Stay tuned for more on that.
California’s vaccine distribution efforts haven’t exactly gone according to plan. The state is adjusting its vaccine rollout plan to account for any surpluses by moving into the next distribution phase. This would include education and childcare workers, food and agriculture, and those older than 65. And not to be a bummer, but one other hurdle ahead will be making sure people show back up for their second shot.
The Governor says that next week they’ll have a “new system” for notification via text and email regarding vaccine eligibility, but he’s on thin ice already with his friends (loose term) in the legislature. A letter sent by 47 legislators demanded a better, more efficient process.
With Assemblymember Shirley Weber moving on to serve as California’s Secretary of State, the race has begun for the AD-79 seat. Ammar Campa-Najjar is in the running, along with Dr. Akilah Weber, among others.
California tops the list of states receiving the most federal defense contracts and payroll again, with $66 billion in defense funding in 2019. We’re followed by Virginia at $60 billion.
Local:
San Diego Mayor Todd Gloria provided his first State of the City this week. He didn’t pull any punches and began with a sobering statement about the city being in a fragile place. However, he did make key announcements regarding homelessness, equity, and complete streets, as well as stating strong support for SANDAG’s Five Big Moves.
UC San Diego, San Diego County, and the Padres have partnered to run a “Vaccination Super Station” to vaccinate 500,000 healthcare workers. The County needs more help from medical pros to administer the vaccines though. If you’re interested in being a big-huge difference-maker in 2021 (resolutions anyone?) check out the San Diego Medical Reserve Corps site here.
This Tuesday, the County Board of Supervisors approved increased enforcement on entities out of compliance with COVID-19 public health orders. The compliance team will now include proactive inspections and citations for violating public health orders. Businesses that continuously fail to comply with public health orders will not be eligible for county funding opportunities.
The Board also approved a series of policy proposals under Chair Nathan Fletcher’s “Framework for our Future”. One resolution declared racism a public health crisis, which was approved unanimously by the board. Other measures included greater transparency at the County level, a new legislative agenda, closer collaboration with the state, and realigning County financing and contracting. We’ll be following up for more details as the policies develop.
The City of San Diego is beginning a tough budget season, with departments warned that cuts are coming. Leadership is signaling that the $124 million deficit will require major reductions.
The San Diego City Council approved the most recent Land Development Code Update this week. Highlights among this list of 44 zoning modifications include removing the minimum parking limit downtown, allowing businesses to permanently use private parking lots for outdoor dining, creating three new moderate-income housing incentives to encourage development, easing to the ability for property owners to convert ground-floor commercial spaces into residential units, and differing DIFs for permits issues between march 2020 and March 2022.
The Oceanside City Council approved a new COVID-19 small business grant program. Small businesses able to demonstrate a loss in profit caused by the COVID crisis can qualify for a grant of $1,000 to $7,5000. Learn more and apply here.
Capital Opportunities & Resources:
- Apply for your first or second PPP Loan now! Learn more here.
- The California Small Business COVID-19 Relief Grant Program application deadline has been extended until January 13. Apply here. The San Diego and Imperial Small Business Development Center has webinars available for more information on how to apply.
- City of Oceanside COVID-19 small business grant program: Small businesses able to demonstrate a loss in profit caused by the COVID crisis can qualify for a grant of $1,000 to $7,5000. Learn more and apply here.
- The California Department of Tax and Fee Administration (CDTFA) is accepting applications for a small business hiring credit against California state income taxes or sales and use taxes. The credit (authorized by SB 1447) is available to certain California qualified small business employers that receive a tentative credit reservation. Learn more here.
- The California Rebuilding Fund is offering small businesses with fewer than 50 full-time equivalent employees loans up to $100,000. Learn more and apply here.
- The County’s Small Business Stimulus Grant Program is accepting additional applications. Eligible businesses must have fewer than 100 full-time employees and are following sectors (restaurant, gym fitness center, yoga studio, movie theater, museum, zoo, or aquarium) was impacted by moving from the Red to Purple Tier OR part of the event industry. Learn more and apply here.
- City of San Diego Temporary Outdoor Business Operations Permit – Businesses (restaurants, retail stores, gyms, hair salons, nail salons) can now expand into the public right-of-way, parking lots, and public spaces. Information on how to apply for a Temporary Outdoor Business Operations Permit can be found here.
- Businesses can reach out to their nearest Small Business Development Center (SBDC), which has developed the Small Business Survival Resources Guide to help business owners navigate through the chaos COVID-19 is having on our communities. SBDC can help with applying for relief, guiding you through available resources, and assisting with cash flow concerns, supply-chain interruptions, workforce capacity, insurance coverage, and more–all at no cost.
- The State Treasurer’s Office has published this list of Federal, State, Local, Private, and Non-profit resources available to small businesses.