Governor’s proposed budget includes $250 million to help ports with COVID-19 losses
The Port of Oakland will be a recipient of California Governor Gavin Newsom’s economic relief for ports. The Governor’s proposed budget includes $250 million for public ports that have been financially challenged due to the pandemic. Governor Newsom made the announcement during the California Chamber of Commerce’s 2021 Virtual Capitol Summit & Host Breakfast last week.
Although trade has been booming for containerized ports, tourism and related businesses like restaurants and hotels on port property have been gutted by the pandemic. California ports have survived despite those revenue losses from port tenants; however, ports need financial assistance.
For example, the Ports of Oakland, San Diego, and San Francisco, have business partners who rely on robust tourism, which in turn pays for port leases. With COVID-19 impacts, ports have had to defer many capital projects and dig into budget reserves to meet the financial consequences presented by the pandemic.
“These new funds will help ports, which are absolutely vital to the state’s economic strength and recovery going forward,” said Port of Oakland Executive Director Danny Wan. “When Oakland’s port flourishes and its business partners are doing well, together, we can support more than 84,000 jobs in the region and impact more than a million jobs across the country.” Mr. Wan is also Vice President of the California Association of Port Authorities (CAPA).
The Port of Oakland served as an early responder during the Princess Cruise ship COVID emergency last year; it offered easy access to COVID testing for its employees, residents, and visitors; and it provided rent relief to small, local businesses at the Oakland waterfront during the pandemic.
Funding relief will help fill the financial gap generated by losses at California ports due to COVID. The funding is from the American Rescue Plan Act of 2021, also known as the COVID-19 Stimulus Package passed by Congress. With budget approval, the funding relief will be distributed by the Governor’s Office of Business and Economic Development (GO-Biz).
“We thank Governor Newsom, Lieutenant Governor Kounalakis, and State Controller Betty Yee for their valued advocacy to make these funds available to California ports at this critical time,” said Mr. Wan. State Controller Yee and Lieutenant Governor Kounalakis both serve as State Lands Commissioners overseeing many port operations, and the Lt. Governor is also serving as the state’s Representative for International Affairs and Trade.
Some of California’s ports’ revenue streams were cut in half due to the pandemic’s impacts on tourism and hospitality industries. Despite those major losses, California seaports have not received direct state or federal relief up to this point.
California ports are critical components of the state’s supply chain, moving goods in and out of the United States. Ports make huge contributions to economic activity and tourism, provide regional employment, and boost revenue for local jurisdictions and the state. California’s ports comprise the most significant system of ports in the U.S.
More information will be forthcoming when the Governor’s budget goes through the approval process in the state legislature next month.