For Clients & Friends of The Gualco Group, Inc.
IN THIS ISSUE – “Larger Than Anything We’ve Encountered”
- Covid-19 Rewrites State Budgets for 2019-20 & 2020-21
- Governor’s Covid-19 Actions
- Early Economic Impacts – “Larger Than Anything We’ve Encountered”
- Unemployment Claims Unprecedented
- California Economy…From Record High to “Dismal”
- Covid-19 Already Affects November Ballot
- State Dept. of Public Health Merits Renewed Investment
- Tech Thriving
- Oil Hunkers Down
FOR THE WEEK ENDING MAR. 27, 2020
Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests. Please feel free to forward.
Stay current daily! For our focused updates via Twitter: @jrgualco / @robertjgore / @gualcogroup
READ ALL ABOUT IT!!
Covid-19 Rewrites State Budgets for 2019-20 & 2020-21
State Dept. of Finance
Just two months ago Gov. Gavin Newsom unveiled a record-breaking $220 billion state budget proposal that pledged new funding for homeless, green technology and health care.
The deal he signs in June won’t look much like that.
The coronavirus outbreak ended California’s long economic expansion, and the assumptions that shaped Newsom’s earlier proposal are being reconsidered.
Newsom’s Department of Finance on Tuesday sent letters to the Legislature and to government agency secretaries advising them that the normal schedule for state budgeting is on hold and that the goals the governor described in January are up for renegotiation.
The letter to the agency secretaries and department directors warned them that they “should have no expectation of full funding for either new or existing proposals and adjustments. The only exception to this new evaluation criteria will be proposals or adjustments necessary to support the emergency response to COVID-19. New requests which fall outside these parameters will not be reviewed.”
The administration is adapting to the economic havoc caused by coronavirus.
The Department of Finance sent a letter to Senate Budget and Fiscal Review Committee and the Assembly Budget Committee, informing them that the department will not be sending any “Spring Finance Letters” this year, due to the novel coronavirus pandemic.
Finance is typically required to provide the California Legislature with updated expenditure and revenue information for policy adjustments related to the governor’s January budget by April 1, but that won’t be happening this year.
“Despite the sustained efforts, the virus continues to spread and is impacting nearly all sectors of California’s economy. Among these impacts Is a potentially severe drop in economic activity, with corresponding negative effects on anticipated revenues for the upcoming 2020-21 fiscal year and beyond,” the letter read, in part. “In light of this evolving situation, the Department of Finance will not propose any April 1 Finance Letter adjustments to the governor’s budget or any May l adjustments to the governor’s budget in appropriations for capital outlay.”
According to the letter, the Department of Finance now will reevaluate all budget changes within the context of a workload budget, that will include all April 1 and May 1 requests. All potential adjustments will be included in the May revision, as well as previously approved adjustments incorporated in the governor’s budget.
http://www.dof.ca.gov/budget/Budget_Letters/documents/BL20-08.pdf
Sacramento Bee
California Gov. Gavin Newsom has taken multiple steps this month to address the growing coronavirus crisis, signing a total of 11 executive orders since March 12.
A three-month tax extension and a statewide directive to stay at home are perhaps two of the more notable ones, but many more changes have occurred at the Democratic governor’s direction.
Here’s what you need to know:
Newsom directed banks to immediately halt foreclosures and evictions if people can’t afford to pay because of the coronavirus. He also authorized local governments to halt evictions for renters and homeowners through the end of May. Under his directive, tenants must still pay the amount they owe, and landlords can still recover overdue rent.
To protect renters and homeowners, he also directed the Public Utilities Commission to monitor steps taken by utilities to implement customer service protections for “critical utilities,” including gas, water, electricity, internet and phone service. The commission must now offer weekly updates.
FIRING WORKERS MORE EASILY
An executive order Newsom signed by Newsom on March 17 makes it easier for certain employers to fire their workers. While written notice is still necessary, some workers can now be fired without 60 days notice as long as the mass layoffs were caused by coronavirus-related “business circumstances that were not reasonably foreseeable at the time that notice would have been required.”
Newsom’s action to indefinitely suspend parts of the state’s Worker Adjustment and Retraining Notification (WARN) Act aims to allow employers to act quickly to mitigate or prevent the spread of the virus, according guidance issued by the labor commissioner’s office.
HOUSING THE HOMELESS
Newsom’s first executive order in response to the coronavirus allowed the state to negotiate with hotels and other part-time housing groups to provide Californians with temporary residences and medical facilities.
The governor later gave local governments more flexibility to spend the $100 million emergency housing money allocated to them by easing certain restrictions that could hamper their ability to quickly house the homeless.
MAKING IT EASIER TO GET UNEMPLOYMENT BENEFITS, OTHER ASSISTANCE
Newsom has waived the one-week waiting period for people who are unemployed and/or disabled as a result of COVID-19. In a separate executive order on March 17, Newsom allowed Medi-Cal, CalFresh, CalWORKS, Cash Assistance for Immigrants and In-Home Supportive Services recipients to continue receiving program benefits for three months without interruption or a reassessment of their eligibility.
KEEPING SCHOOLS CLOSED BUT FUNDED
School districts, county education offices and charter schools, will continue to receive state funding while they are closed so they can continue paying their employees and offering students the school meals they would have otherwise missed.
Newsom also encouraged K-12 schools to offer distance learning or independent studying to students and directed two state agencies to provide guidance on how parents should care for their children during ordinary school hours.
The governor also got approval from President Donald Trump’s administration to halt statewide standardized testing. High school students will still be able to take Advanced Placement tests from home. The College Board, however, has cancelled its May 2 SAT test.
DEALING WITH THE SHORTAGE OF HEALTHCARE WORKERS
California’s Emergency Medical Services Authority, Department of Social Services and Department of Public Health can now allow first responders and health and human services care providers with no signs of symptoms to continue working during the pandemic.
Newsom has also given the public health department director the authority to waive certain licensing and staffing requirements as long as the agency posts any waiver approvals on its website.
Additionally, he suspended work hour limits for employees within his emergency services office.
TRANSITIONING TO MAIL-IN BALLOTS
California’s March 3 presidential primary election day may be over, but a couple hundred thousand ballots remain uncounted. Newsom is giving counties three more weeks to record the outstanding votes, meaning the results likely won’t be certified by the state until May 1.
California overwhelmingly votes by mail. A recent order from Newsom aimed at preventing the spread of the coronavirus during the voting process will require some key races to only offer mail-in ballots.
Most notably, those eligible to participate in the May 12 special election to fill the vacancy left by former Rep. Katie Hill will be required to cast their ballots by mail. Republican Mike Garcia and Democrat Christy Smith are competing to serve the remainder of Hill’s term. They’ll square off against each other in the November general election to see who wins the subsequent, full two-year term.
Four counties — Contra Costa, Plumas, Santa Clara and Sonoma — are already planning to have their May 5 local elections conducted entirely by mail, according to the Secretary of State’s Office.
CONDUCTING GOVERNMENT MEETINGS
State and local government bodies can now hold meetings via teleconference. The decision from Newsom aims to curb the spread of the coronavirus among elected officials conducting essential business to keep the state and its cities functional.
https://www.sacbee.com/news/coronavirus/article241439676.html?#storylink=cpy
“Larger Than Anything We’ve Encountered”
CalMatters
Social distancing may be good for public health these days, but it isn’t good for the California economy. As the coronavirus pandemic forces millions of residents to cancel dates and travel plans, retreat from social life to shelter in place, key cogs of the state’s economic engine are grinding to a halt. That’s an unprecedented shock for a modern economy, experts say — one that will test the resilience of California’s decade-long boom and the adequacy of its $18 billion cash reserve.
What we know so far: The coronavirus is almost certainly causing the first pandemic-induced recession of the postwar era. For millions of Californians and their families, that may mean less work, lower income and more financial stress, particularly for those least able to weather the shock: Californians living at or below the poverty line, those without savings or outside financial support and people living on the street.
What we still don’t know: how bad this will get. Never before in the state has so much business activity come to such an immediate and widespread stop at once, the experts say. Policymakers, businesses and regular Califorians are just beginning to grapple with what this all might look like.
“It’s so much larger than anything we’ve encountered before,” said Jesse Rothstein, professor of public policy at UC Berkeley. “I think this is going to be larger than the Great Recession. I hope it doesn’t last as long, but the magnitude of the shock is bigger.”
The state’s enormous, diversified economy — fifth largest in the world — isn’t reliant on any one industry. But sunny California’s tourism, hospitality and retail sectors — together providing about one in five jobs, according to state statistics — are proportionately larger here. So are transportation, warehousing and other trade-related industries. All are taking the most immediate financial hit.
And while the tech sector that has driven so much of the state’s economic growth may very well be better equipped to handle — even prosper from — the new housebound economic order, such a dramatic slowdown is likely to leave few sectors unscathed.
“A month ago California was in a situation where we still had one of the strongest economies we’ve ever had,” said Rob Lapsley, president of the California Business Roundtable, which represents major employers in the state. “Now, the underlying analysis on all of this is uncertainty. Nobody knows. We’re in uncharted territory.”
Earlier this week, President Trump said the U.S. economy may be headed for a recession. Some experts say we’re already there.
According to a team of economic forecasters at the UCLA Anderson School of Management, the country likely entered recession this month. California, said Jerry Nickelsburg, who directs the forecast, probably will get hit harder than the nation as a whole.
“Over the last week … transportation in the U.S. has plummeted,” he said. “People are not going on vacation. Transatlantic flights have been canceled, which means less travel but also takes a lot of (air) cargo out of the system.”
The forecasters project the state unemployment rate to go from just under 4% in January to 6.3% by the end of the year.
Hitting bars, restaurants, gyms and hotels especially hard, the economic constriction, like the contagion that precipitated it, is likely to spread quickly as newly unemployed workers stop spending, shuttered businesses cut off their orders and lenders and landlords stop receiving their monthly checks.
“You add it all up and who is holding up the economy? Health care,” said Nickelsburg. “That’s not enough.”
During a public health emergency, when millions of people are being told to steer clear of restaurants, bars, hotels and airplanes, it doesn’t take a lot of imagination to surmise which industries will suffer the most.
Liz McAlpine was a bartender in Oakland before the restaurant where she works went take-out only, cut her schedule to four hours a week and put her on boxing and bagging duty for deliveries. She makes about $14 an hour and can no longer count on the tips that once made up a considerable portion of her earnings. She had side jobs that have fallen through. She said she has $17,000 in student loans to repay. Her three housemates are now out of jobs, too.
“None of us have a Plan B or C or D,” she said. We have no idea what we’re going to do. I have a tent.”
The pandemic has hammered both the state’s neighborhood bars and bistros and its biggest tourism draws. This month, Disney shuttered the gates of the Magic Kingdom, and the Coachella music festival was postponed from April to October. The opening of a 466-room Marriott in Anaheim was canceled and has yet to be rescheduled while, nationwide, roughly 8 in 10 hotel rooms sit empty.
Retail, hospitality, food and travel are not just major employers in the state. They also hire a disproportionate number of California’s low-wage workers.
The top job categories for the state’s working poor, according to an analysis by the Public Policy Institute of California, include janitorial services, food preparation and jobs in the arts and entertainment industry. Another PPIC analysis estimates that 22% of food and accommodation workers in California are at or below the poverty line already.
“Poverty in California is really about working poverty,” said Sarah Bohn, one of the authors of both analyses. “The social safety net plays an important role, but for the vast majority of low-income families, it’s really about their earnings.”
Many of these workers are “already vulnerable (to) becoming homeless or suffering other sorts of housing instability,” said Chris Hoene, executive director of the California Budget and Policy Center, a think tank that focuses on low-income Californians. “What will change in their hours or work schedule mean for them?”
And when the public health emergency does end, many laid-off workers may not be able to count on getting their old jobs back, said UCLA’s Nickelsburg. One possible side effect of this downturn is that it will accelerate trends that were already developing before the pandemic.
”Brick-and-mortar retail was already contracting,” he said. “To the extent that (the epidemic) forces more contraction for brick-and-mortar, you might not expect all those businesses to come back.”
Meanwhile, Amazon announced that it would be hiring 100,000 workers to handle the flood of online delivery requests. A company spokesperson said 12,000 of those hires are expected to be in California.
Rachel Michelin, president of the California Retailers Association, which represents the state’s largest retailers, said consumers shifting to online sales “might make a dent” in the financial landslide now burying the association’s members — but only a small one.
Even if the shelter-in-place order is lifted, she said, “you have people who aren’t working, consumers who are now wondering, ‘Am I going to have a job?’” she said. “I think people are going to think twice about buying things they don’t necessarily need until we get past this.”
A prolonged economic freeze would be particularly hard for smaller businesses that don’t have the cash reserves to cover overhead like payroll, rent, mortgages and taxes until things improve.
“How do you give restaurants, in this case, the ability to hibernate?” said Jot Condie, president of the California Restaurant Association. How do they “ramp down operations so that when the all-clear is given, they can hit the switch and their workers can start working again and get back into the game, and restaurants can be open for business?”
With slim margins and high overhead costs, Condie said, many restaurants won’t survive much longer than a month without outside help.
Ann Callahan owns and operates a bed-and-breakfast in San Diego’s Hillcrest neighborhood, a cozy getaway spot that has become a kind of pandemic boarding house.
Although all of her typical conventioneer clients have cancelled, she still has four rooms booked. Three are occupied by out-of-towners who want to spend the crisis close to loved ones in the area, and a couple from London whose cross-county American holiday was abruptly cancelled.
Callahan said she’s set up new protocols, making sure chairs are at least six feet apart and directing all guests to use hand sanitizer before using appliances. She said she’s lucky to have enough money saved up to weather a prolonged crisis. But no one knows how prolonged this one will be.
“It’s not like 9/11. When it hit us, everything closed. But then we knew the worst of it was over going forward,” she said. “We don’t know when we’ve hit the peak of the pandemic.”
Unemployment Claims Hit Unprecedented Level
Sacramento Bee
New unemployment claims surged dramatically in California and the nation last week as the coronavirus outbreak continued to send the economy into a tailspin.
California saw 186,809 new claims last week, up dramatically from 57,606 the previous week.
The state unemployment insurance system has been overwhelmed by the deluge. The state’s nonpartisan Legislative Analyst’s Office has estimated that the first benefits for new claimants will take
The agency is rapidly seeking state workers with experience in the UI program, and is redirecting staff to help.
The analysis noted that during the 2007-09 recession, the last major economic downturn, there were similar delays, and the state immediately issued benefits based only on information in applications.
Normally, EDD takes several steps before issuing benefits — such as contacting the employee’s former employer.
“Based on our understanding, this directive significantly reduced benefit delays. At the same time, however, it created new administrative challenges for EDD and some confusion for employers,” Monday’s analysis said.
There was encouraging news, though.
Most employees are eligible to get benefits, and the stimulus package signed by President Donald Trump last week makes it easier to cut through red tape.
It also provides about $120 million in additional unemployment insurance funding to the state, and extends the amount of time someone can collect benefits from 26 weeks to 39 if unemployment jumps sharply. The extra 13 weeks would be federally funded.
Another help for state financing: The state’s unemployment insurance fund often becomes insolvent during downturns. To cover the costs, Washington lends money to the state, and the state has to pay interest.
The stimulus bill suspends the accrual of interest through the end of the year.
“Given the magnitude of initial unemployment claims received so far, the state UI Trust Fund likely will become insolvent in the coming months, meaning this provision of the federal relief act could reduce state general fund costs, at least to some degree, related to repaying interest on federal UI loans,” the Monday analysis said.
Last year, the average unemployment benefit in California was $330 a week for 17 weeks.
https://www.sacbee.com/news/coronavirus/article241438651.html#storylink=cpy
California Economic Outlook…Record High Jobs to “Dismal”
Sacramento Bee
California could lose 1.6 million jobs by summer, taking the state from record-low unemployment to a dismal economic picture that could rival or exceed the Great Recession in a matter of weeks.
But economists say the recovery could be fairly swift, maybe just as swift as the downturn, if the coronavirus pandemic is brought under control quickly.
A new analysis from the Economic Policy Institute, a left-leaning think tank, said Wednesday the nation and California could lose about 11 percent of their private-sector jobs to COVID-19 by June. That would translate into 14 million jobs erased coast-to-coast and 1.6 million in California.
The updated projection shows how quickly economic conditions have deteriorated in the week since California Gov. Gavin Newsom and other governors issued “stay at home” orders that have brought much of the economy to a halt. A week ago the EPI said California’s job losses would total 600,000.
The report’s co-author, David Cooper, said the new estimate took into account the effect of a $1 trillion stimulus plan — a figure that’s already been surpassed. Congressional leaders announced early Wednesday they had agreed on a $2 trillion stimulus package, and Cooper said that the extra funding will likely reduce job losses.
“Things are happening so fast that any projection has a huge amount of uncertainty,” said economist Jeff Michael of the University of the Pacific.
Still, he found the EPI estimates plausible. A 1.6 million job loss, coupled with the 753,000 listed as already unemployed before the pandemic struck, would leave California with about 2.3 million people out of work. That would roughly match the worst of the Great Recession, when unemployment peaked at 12.3 percent in 2010 in California.
Compared to the Great Recession, this downturn will come more quickly. “Near-term shock is even steeper and peak is even worse,” Michael said. ”You have 20 percent of your economy going into hibernation.”
The Bee applied the assumptions in EPI’s latest analysis to regions throughout California. The analysis found that the Sacramento metro area could lose about 88,000 jobs, or about 11 percent of its private-sector workforce.
That would put the region’s unemployment rate around 12 percent. Unemployment in the Great Recession peaked at 12.7 percent in Sacramento in early 2010.
But Michael and Chris Thornberg, founder of Los Angeles consulting firm Beacon Economics, said the recovery could happen a good deal faster than it did following the last recession.
The Great Recession was marked by the collapse of the construction and financial industries, and the loss of billions of dollars in home values. Those over-inflated values were driving a lot of consumer spending as Americans borrowed against their home equity to finance purchases of boats, appliances and other goods.
That meant years of slow and painful recovery.
This time, the economy has been brought to its knees by a virus. If the public health crisis passes in, say, two months, economic activity should snap back into place, said Thornberg, who’s also director of the UC Riverside Center for Economic Forecasting.
The downturn “is going to be quick, it’s going to be nasty, and it’s going to be gone,” Thornberg said.
Federal and state officials are debating how quickly to ease shutdown measures. President Donald Trump has been talking about reopening the economy by Easter. Newsom said this week the economic shutdown in California could last another 12 weeks.
Thornberg said his projections could prove faulty if the pandemic is still raging four months from now and the death toll soars into the tens of thousands.
“It’s a separate conversation,” Thornberg said.
Last week Newsom said new unemployment claims have already soared past 100,000, as vast areas of the economy shut down, from bars to tourism to much of the manufacturing sector. Business owners in the Sacramento area have told The Sacramento Bee they’re worried about their companies surviving as the economic lockdown persists.
Michael said the recovery could be uneven and would affect different businesses in different ways. Even as restaurants reopen in full, “people aren’t going to eat five meals a day” and it will take a while for many businesses to recover the income they’re losing now, the Pacific economist said.
EPI’s latest analysis uses estimates from Goldman Sachs and Morgan Stanley of the damage from the coronavirus to the national economy and applies them to employment numbers. It takes into account each state’s relative share of employees in the leisure and hospitality and retail sectors, which may be hit particularly hard as Americans stay at home and away from stores and restaurants.
The estimates are crude because each area has a unique mix of jobs and a different number of workers able to telecommute. Also, the full response to COVID-19, and the resulting economic impact, are still in flux.
https://www.sacbee.com/news/coronavirus/article241503521.html?#storylink=cpy
Covid-19 Already Hits the Ballot
CalMatters Commentary
As the coronavirus pandemic was clobbering California — and the rest of the known world — this month, local government officials in Sacramento County enthusiastically decided to ask voters to approve a hefty sales tax increase for transportation improvements.
Were members of the Sacramento Transportation Authority board smoking some of California’s newly legalized marijuana? There must be some explanation for their flight of fiscal fantasy.
Even before the pandemic crisis erupted, California’s voters were showing strong signs of what some call “tax exhaustion” — a quiet rebellion against the seemingly insatiable demands of state and local officials for ever-higher amounts of money, either directly from taxes or from bonds to be repaid by taxes.
More than half of the several hundred local tax and bond measures on local ballots were rejected in the March 3 election, although a few more might squeak through once all votes are tallied. Even more significantly, voters overwhelmingly defeated a very large statewide bond issue for education, backed by Gov. Gavin Newsom and a multi-million-dollar sales campaign.
As the economy goes into a tailspin because of the business shutdowns mandated to battle COVID-19 and hundreds of thousands of workers lose their jobs, the prospects for any tax or bond measure plummet even further. And the negative effects are likely not confined to just financial proposals.
Dozens of initiative measures had been proposed for the November ballot as proponents hoped that a very contentious presidential election would generate a bumper crop of voters.
A few have qualified, but signature-gathering has virtually stopped as Californians hunker down in their homes, under official orders to avoid personal contacts that spread the coronavirus. At the moment, it appears that voters will decide the fate of just five statewide measures:
—A referendum to overturn Senate Bill 10, an historic legislative effort to do away with cash bail for criminal defendants and replace it with a system of evaluating them for flight risk. Bail bond agents facing eradication of their industry are sponsoring a referendum that would void the new law and have odd-bedfellows support from some bail opponents who don’t think the new law goes far enough.
—An initiative sponsored by the California Association of Realtors to make it easier for those over 55 or disabled to sell their homes and transfer their Proposition 13-limited tax assessments to new properties, regardless of their value. It would, realtors hope, generate more housing purchases.
—An initiative to give local governments authority to impose rent control, sponsored by the AIDS Healthcare Foundation, whose similar measure was rejected by voters in 2018.
—An initiative by law enforcement groups to partially repeal Proposition 57, a 2016 measure sponsored by former Gov. Jerry Brown that softened penalties for felonies deemed to be non-violent. Critics of Proposition 57 contend it went too far and is too lenient on those who commit serious and even violent crimes.
—An initiative backed by unions and other pro-tax organizations to remove some of Proposition 13’s property tax limitations from commercial properties such as hotels, office buildings and warehouses. Although the “split roll” measure qualified, its sponsors, concerned that it might fail, proposed a revised version they thought would be more likely to pass. However, it’s one of the proposals still in the signature-gathering phase, so the original version is likely to remain on the ballot and face an uphill battle for approval.
State Dept. of Public Health Merits Renewed Investment
Sacramento Bee
Fourteen years ago, California made a huge investment in public health by creating a standalone state department and seeding it with tens of millions of dollars in special funding for emergency supplies.
In 2009, former Republican Gov. Arnold Schwarzenegger put it to work, using the new department to lead the state’s response to a swine flu outbreak that year.
Then, the Great Recession hit, and California’s spending on its public health department plateaued, even as a 10-year economic expansion swelled the state’s budget by nearly $100 billion.
Now, Democratic Gov. Gavin Newsom is pulling all the financial levers he can to curb the spread of COVID-19, which has already infected 675 people as of Thursday and killed more than a dozen. He projects 25.5 million Californians, more than half the population, will be infected in the next eight weeks if the public doesn’t cooperate with aggressive social distancing measures.
Newsom late Monday secured $1.1 billion through bipartisan legislation that frees up emergency funds for hospitals, schools, day care centers and local governments in the fight against the rapidly spreading coronavirus.
The urgency reminds some health advocates of an era that prioritized public health funding.
California allocated $3.4 billion — about 2.8 percent of its $119 billion budget — for the public health agency in its 2009-2010 financial blueprint.
A decade later, Newsom allotted the same amount of money, now 1.5 percent, in his current $215 billion budget.
“There was a time there that Arnold Schwarzenegger had a bold vision and a responsible one,” said Jack Lewin, former CEO of the California Medical Association and current chairman of the National Coalition on Health Care. “But I think that got diluted over the course of time. People get complacent, and money goes elsewhere.”
The department is charged, among other things, with funding lab services, chronic disease prevention, family health programs, infectious disease control and Alzheimer’s research.
Because some of the department’s funding is tied to specific diseases, the state lacks flexibility to move money and resources where they’re needed, said Michelle Gibbons, executive director of the County Health Executives Association of California.
The budget earmarks outbreak prevention money for public health issues like STDS, HIV and Hepatitis C.
“It’s not just the funding levels but the categorical nature of funding,” Gibbons sad. “You get funding for diabetes in a grant form the government, but you can’t necessarily use that for communicable diseases.”
State. Sen. Richard Pan said he’s for a long time known the state needed to better prepare for a potential health emergency. On March 6 of last year, Pan said, he held a hearing as the chair of the Senate Committee on Health about how California would handle an inevitable outbreak.
“Even though we don’t know what the disease will be, usually there is at least one, if not more, diseases out there,” Pan said. “There’s never nothing going on.”
The Sacramento Democrat and pediatrician said he worked with Newsom’s office last year torebuild funding.
Last year’s budget provided $775 million and funded 350 positions for infectious diseases, a more-than-$100 million bump from 2018. The financial blueprint also provided $96 million for emergency preparation.
But Pan said more money is needed so local agencies can hire more expert personnel, invest in lab testing and maintain the resources to juggle both intervention and prevention work.
“Our county health departments are already struggling with the ongoing stuff they have, like sexually transmitted diseases,” he said. “What things didn’t get done because (officials) got pulled away to deal with the outbreak? That’s a question we’ll need to ask when this is over.”
Although Pan said the state is now increasing spending, public health advocates are bracing for cuts from the federal government this year.
President Donald Trump’s 2021 budget request he released in February decreases the federal Department of Health and Human Services’ budget by 10 percent. His proposal further would have shaved funding by nearly 16 percent for the Centers for Disease Control and Prevention. The CDC provides block grants to states, which funnel the funds into local health departments.
Lee Saunders, president of the American Federation of State, County and Municipal Employees, said Congress has to take “bold steps” to help state and local governments fund the resources necessary for public service workers “to fight this pandemic and protect our communities.”
“For years, our nation’s public service workers have been asked to do more with less,” Saunders said. “They are rising to the current challenge, but this crisis exposes how shortsighted austerity measures have hurt our ability to respond when our communities need help the most.”
An independent health care advocacy group still ranks California’s emergency preparedness among the middle of states. A 2020 report applauded the Golden State’s strong vaccine laws, but cited the state’s water infrastructure inequality, wildfires and last fall’s emergency power outages as health emergencies.
Only 35 percent of the state’s hospitals received an “A” rating for patient safety, but California was among 48 states that reported having a “plan in 2019 for a six- to eight-week surge in laboratory-testing capacity to respond to an outbreak or other public health event.”
The California Emergency Medical Services Authority does have “budgetary resources” to deploy shelters and medical emergency structures, said Jennifer Lim, deputy director of legislative, regulatory and eternal affairs with the agency.
The resources come from an investment Schwarzenegger and lawmakers made in 2006 when they bought $172 million worth of emergency “surge capacity” supplies and spent $18.3 million for three mobile hospitals.
The $1.7 million needed to store the hospital supplies was “zeroed out” under former Gov. Jerry Brown in 2011, Lim said, and the hospitals were instead divided into smaller units for the state and local agencies to use. Some of the structures were deployed during recent disasters like the Camp, Carr and North Bay fires. One hospital was transferred to the California National Guard.
EMSA has not deployed these shelters in response to COVID-19, though some local agencies have used their structures, Lim said.
“Were the state to deploy this program as part of the COVID-19 response,” Lim continued, “there are a number of budgetary resources available to support that deployment.”
Former Newsom aide Daniel Zingale, who has shaped health policy in California for decades through his work in state government and influential advocacy groups, said he thinks the state has taken strong steps to prepare for a pandemic.
“I would give the state of California very high marks, at least from Gray Davis on,” he said. “The past four governors have built a public health infrastructure that is second to none in the nation.”
California officials learned from their mistakes during the AIDS epidemic, which disproportionately hit San Francisco, Zingale said. Although California and the nation eventually responded effectively to the spread of the virus, officials were slow to act.
“It provides the most sobering, cautionary tale because we did get off to such a slow start with the failure of state and federal leadership at that time,” he said. “We are so far from that dark history today.”
Lewin, the former CMA executive, said he agrees California is better prepared than most states because it has a “much more effective Department of Public Health” that’s well-connected to county departments.
He added that COVID-19 offers an opportunity for California to reinvest in its system and end a cycle of putting public health “at the bottom of the totem pole.”
“When this whole thing starts to resolve, we need to stop and look at our public health infrastructure,” Lewin said, “and decide where we need to invest to protect us from the inevitable next time. We know that we will see some kind of crisis in the future.”
https://www.sacbee.com/news/coronavirus/article241237666.html?#storylink=cpy
NY Times
OAKLAND — While the rest of the economy is tanking from the crippling impact of the coronavirus, business at the biggest technology companies is holding steady — even thriving.
Amazon said it was hiring 100,000 warehouse workers to meet surging demand. Mark Zuckerberg, Facebook’s chief executive, said traffic for video calling and messaging had exploded. Microsoft said the numbers using its software for online collaboration had climbed nearly 40 percent in a week.
With people told to work from home and stay away from others, the pandemic has deepened reliance on services from the technology industry’s biggest companies while accelerating trends that were already benefiting them.
Amazon has muscled in on brick-and-mortar retailers for years, but shoppers now reluctant to go to the store are turning to the e-commerce giant for a wider variety of goods, like groceries and over-the-counter drugs.
Streaming services like Netflix have dampened box office sales for movies in recent years. Now, as movie theaters close under government orders, Netflix and YouTube are gaining a new audience.
Companies were already dumping their own data centers to rent computing from Amazon, Microsoft and Google. That shift is likely to speed up as millions of employees are forced to work from home, putting a strain on corporate technology infrastructures.
Even Apple, which once appeared to be among the American companies most at risk from the coronavirus because of its dependence on Chinese factories and consumers, appears to be on good footing. Many of Apple’s factories are nearly back to normal, people are spending more time and money on its digital services, and on Wednesday it even released new gadgets.
“The largest tech companies could emerge on the other side of this much stronger,” said Daniel Ives, managing director of equity research at Wedbush Securities.
That’s not to say to say major technology companies shouldn’t be worried. Advertising, the lifeblood of Google and Facebook, tends to suffer during economic downturns. The stocks of Apple, Microsoft, Amazon, Facebook and Google’s parent company, Alphabet, have collectively lost more than $1 trillion in market value from a month ago, when U.S. stocks traded at record highs. And Microsoft and Apple have cut their short-term financial forecasts because of slowing consumer spending.
Beyond the biggest companies, it is more of a struggle. Communication tools like the videoconferencing service Zoom are now essential, but ride-hailing firms like Uber and Lyft and property-rental sites like Airbnb are seeing customers vanish.
The $3.9 trillion global technology industry will suffer this year, though just how much remains unclear. In December, the research firm IDC forecast 5 percent worldwide growth for sales of hardware, software and services in 2020. After it became apparent a month ago that the coronavirus would disrupt supplies and cut sales in China, IDC said annual revenue might inch ahead at only 1 percent. That 1 percent growth now looks decidedly optimistic, said Frank Gens, chief analyst at IDC.
But when the economy does eventually improve, Big Tech could benefit from changes in consumer habits. And despite more than 18 months of criticism from lawmakers, regulators and competitors before the pandemic hit the United States, the biggest companies are likely to finish the year stronger than ever.
In a blog post last week, Dave Clark, Amazon’s senior vice president of worldwide operations, said it was adding the new jobs at its U.S. warehouses and delivery network because “our labor needs are unprecedented for this time of year.”
One reason for Amazon’s increase in demand is that shoppers are buying a broader variety of goods. From Feb. 20 to March 15, over-the-counter cold medicine sales rose ninefold on Amazon in the United States from a year earlier. Dog food orders increased 13-fold, and paper towels and toilet paper sales tripled, according to CommerceIQ.
Voice calling over Facebook’s WhatsApp messaging service has doubled in volume, Mr. Zuckerberg said on a conference call with reporters Wednesday. Facebook’s Messenger app has had similar growth, he said.
“So the normal spike for us is New Year’s Eve, right, where basically everyone at the same time just wants to message everyone and takes a selfie and sends to their family wherever they are, and to wish them a happy New Year,” Mr. Zuckerberg said. “And we are well beyond” that spike.
Analysts are bullish about Facebook’s prospects because many people turn to it for news in times of crisis and to distract themselves while working from home.
“We believe that many Facebook users have been accessing its properties at meaningfully elevated levels over the last several weeks,” Michael Pachter, an analyst at Wedbush Securities, wrote in a research note last week.
The shift to work at home has also demonstrated the merits of cloud computing when use unexpectedly spikes. For companies managing their internet infrastructures, making adjustments to computing needs on the fly is expensive and complicated. Cloud computing makes it easier.
Microsoft has aggressively pushed its new business messaging and collaboration tool, Microsoft Teams, which competes with the independent company Slack. On Thursday, Microsoft said the number of users on Teams had grown 37 percent in a week to more than 44 million daily users. There have been at least 900 million meeting and call minutes on Teams every day.
“We believe that this sudden, globe-spanning move to remote work will be a turning point in how we work and learn,” wrote Jared Spataro, a corporate vice president at Microsoft.
Even Apple, a company with hundreds of closed stores around the world (except now in China), is increasingly looking as if it will emerge from the pandemic in good shape.
Terry Guo, the head of Foxconn, which assembles most of the world’s iPhones for Apple, told reporters on March 12 that Foxconn’s Chinese factories were resuming production ahead of schedule and were back to normal — well ahead of expectations that would happen by the end of March.
Apple has tried to move away from its heavy reliance on device sales and toward so-called services revenue, which includes app sales and subscriptions to its music and TV services.
For that business, having much of the public in the United States and Europe stay inside is almost certainly good news. Early data shows that people are spending more time watching TV. Apple has spent billions of dollars on original programming for its Apple TV Plus service, hoping to hook people enough to pay $5 a month for it.
Bakersfield Californian
Despite receiving a privileged designation from the state during the coronavirus pandemic, Kern County oil producers are hunkering down as dismal market conditions make it unlikely that investment and hiring in local oil fields will return anytime soon.
A small bump in barrel prices Tuesday and statewide data showing oil rig activity has not slowed all this month belie what industry people say is a very negative outlook for the county’s signature industry.
Local oil executives who have suffered through steep price drops in the past say this time is different in that a Russian-Saudi price war has coincided with an epic downturn in the world economy, making it unknowable when a recovery might arrive.
Work carries on in the local oil patch nonetheless, thanks to an exemption in Gov. Gavin Newsom’s stay-at-home order last week allowing energy production and other “critical infrastructure” activities to continue.
While countless jobs have been lost in recent weeks, and additional cutbacks seem likely, industry leaders voiced optimism Tuesday that the industry will persevere and the economic vitality it represents locally will eventually return.
“We know how important what we do is to the state and especially to Kern County. We’re going to be here when this is over with,” said Steve Layton, president of E&B Natural Resources, a medium-size oil company based in Bakersfield.
In offices of Bakersfield oilman Chad Hathaway, who said his business has slowed to “a crawl” during about the last two weeks, one of the remaining employees has taken to posting famous quotes from football icon Lou Holtz. One reads, “I’ve never known anyone to achieve anything without overcoming adversity.”
Hathaway and others, including publicly traded oil producer California Resources Corp., expressed hope political leaders will do something to stem the flow of discounted, foreign oil to California refiners, which has put pressure on in-state production.
“We hope that state and federal leaders from both parties will come together to address this threat to California’s energy supply,” Santa Clarita-based CRC said by email.
Oilprice.com reported that the U.S. oil benchmark, West Texas Intermediate, rose nearly 3 percent Tuesday to close at $24.60, which is still near 20-year lows and well below many domestic producers’ operating costs. The international standard Brent Crude increased by about 1.4 percent to reach $30.16.
Gasoline prices, meanwhile, continue to fall. The Automobile Club of Southern California said a gallon of regular unleaded averaged $3.24 on Tuesday, 3 cents lower than Monday’s average and more than 8 percent less than the average from a month prior.
Oilfield service company Baker Hughes reported 12 oil rigs remained active in California as of Friday, which was unchanged since before prices plummeted by about 25 percent starting about March 9.
Permit applications to state oil regulators were similarly unresponsive in the immediate aftermath of the drop in barrel prices.
State records show there were 133 applications for new drilling in the region that includes Kern County, an increase of 80 percent from the week before. More recent data were not available Tuesday.
But industry insiders say those figures obscure the widespread job cuts and halt in investment that immediately followed the price downturn.
Oil major Royal Dutch Shell said Tuesday it would slash its capital spending by about 20 percent, or $5 billion, while also selling $10 billion in assets and trimming its operation costs by at least $3 billion.
Chevron Corp. said simply that it is looking to make adjustments that would bring its business in line with the new supply-and-demand environment.
In an emailed statement, the company noted it is better positioned than most to endure current low prices. It added that its thoughts are with people affected by the new coronavirus and the impact it is having on local businesses and Kern’s economy.
Rock Zierman, CEO of the California Independent Petroleum Association trade group, said Kern County oil production will become uneconomical and wells will be shut in. He added his voice to the chorus of critics dismayed by Saudi and Russian price “manipulation.”
He also pushed back against state regulatory changes that had slowed local oilfield activity even before this month’s price drop.
“The state arbitrarily refusing to review permits will only make these problems worse and, in turn, hurt California consumers because our state is so dependent on Saudi oil for our vast energy needs,” he wrote in an email.