What’s a ‘recovery’ fund and why is it important to know?
The Rise Fund, a $1 billion fund designed to help California businesses recover from the effects of the California drought, was launched in October 2017 to help with the transition to the new normal.
The fund is designed to cover costs such as capital expenses, payroll, employee stock options and stock dividends.
But the state’s chief financial officer says the fund is just one part of a larger state recovery effort.
“We’ve had some pretty big economic shocks, but I think this is really about providing a cushion for businesses and consumers that may have been hit hard by the drought,” said Chief Financial Officer Joe McBride.
The state is expecting to receive about $1.3 billion in recovery funds this year.
That’s a fraction of what it was projected to receive in 2017, which would have brought the state $3.5 billion.
“It is a pretty significant amount,” McBride said.
California’s state revenue shortfall is expected to be $1 trillion over the next decade, according to the state budget office.
In 2018, state revenue is expected at $2.3 trillion.
The rise fund is a new type of fund that relies on the financial institutions that provide services to California’s businesses to make payments.
The fund has been in operation since January and McBride says the state has already made some progress.
But many Californians still aren’t sure how they’ll be able to cover their expenses.
“There’s some people who don’t have the ability to pay their bills,” he said.
The Rise Fund has received $4 million in private investment from companies such as Google, Apple and Tesla.
It also has received money from California’s state treasury, and McBride says the funds will be distributed by the state in the next two years.
McBride says he doesn’t expect the fund to become a major source of revenue for California.
“In general, it’s a way to provide relief to businesses that may be suffering,” he explained.
McBride also pointed out that the state doesn’t have to take a hit from the California government, as other states have done in recent years.