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Bay Area Headlines: Friday, 5/8/20, AM

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California's Phased Recovery / SFUSD's Huge Budget Deficit / The State's $54 Billion Shortfall / Scenes From A (Reopened) Mall

California's Phased Recovery

As expected, Governor Gavin Newsom announced, yesterday, that most of California is moving into the next stage of its phased reopening. That does not include the group of Bay Area counties that are maintaining strict stay-at-home rules. But elsewhere, the state released guidelines that businesses will have to meet if they want to resume operations.

Newsom says the state is officially moving into phase two, which means some retail and manufacturing businesses can reopen:

“All with adaptations, all with modifications, but all with an eye to turning the page and moving into a new phase in terms of our economic recovery.”

The new guidelines direct all businesses to screen employees for COVID-19 symptoms, keep things sanitized, and make sure workers and customers can maintain a safe distance.
But they’re also industry-specific. For example, retailers are encouraged to prioritize delivery and curbside pickup. Manufacturers are being told to install shelving to reduce person-to-person contact during production hand-offs.
What’s unclear is how these measures will be enforced, and whether counties will be allowed to discipline businesses that violate them.

SFUSD's Huge Budget Deficit

The San Francisco Unified School District just outlined its budget for next year. It’s not pretty. The budget presented at a Board of Education committee meeting, Wednesday, includes a deficit that could exceed $82 million for the upcoming school year. How will they deal with it? It starts with a $16 million cut to the central office. Then another $10 million at school sites. After that, it’s bits and pieces in million dollar chunks. Many vacant positions throughout the district will be eliminated, and pink slips, which were already anticipated, are likely.

The school district can’t expect much help from the city or the state, which are also facing huge budget deficits. Governor Newsom, yesterday, noted that California faces a shortfall of more than $54 billion. He’s expected to release his revised state budget next week, and it should be noted that state funding accounts for 80% of most school district budgets, which are mostly spent on teacher and staff salaries.

SFUSD Commissioner Jenny Lam told the San Francisco Examiner, “We acknowledge that this is just going to be devastating times.”

The State's $54 Billion Shortfall

California faces a budget shortfall of 54 billion dollars due to plummeting tax revenue tied to COVID-19. That’s according to a new estimate from the state department of finance. Budget experts say California is better prepared for this fiscal crisis because it tucked away about $20 billion in its rainy day fund. And Governor Gavin Newsom says he’s confident the state will get through this, but…

“My optimism is conditioned on this: More federal support.”

Chris Hoene leads the California Budget and Policy Center. Without help from the feds, he says…

“It’s pretty hard to foresee how the state could manage through a shortfall of this size without making significant cuts to key programs and services.”

Hoene says public schools could be at risk for funding cuts. So could  county governments, which rely on state dollars for health services. Layoffs and furloughs for state workers are another possibility, says Sacramento State Finance Professor Sanjay Varshney.

“I think it’s going to basically wreak havoc, in my opinion, on the state itself. And anybody related to the state.”

Newsom has asked Congress to consider ‘a one trillion dollar relief package’ … to help state and local governments nationwide.

Scenes From A (Reopened) Mall

Dozens of people lined up to enter the Yuba-Sutter Mall Wednesday morning, many not wearing masks. It’s the first mall to reopen in California since they were all closed in response to the coronavirus pandemic. The mall is open under the authority of the local health department, but in defiance of the state. Most of the biggest chains like Sears and JC Penney’s are closed. But locally-owned stores like Diya were open. Gurjot Johl Is the owner of the store he says sells high-end Indian clothing.

“Our business usually, this is like wedding attire and stuff.Since the churches and everything is closed, no weddings are going on. It’s gonna be a minute til everything opens up.”

He says the store had been open for all of two days when the state order came down a month and a half ago to close. Natasha Shelton is the mall’s general manager and says the local stores will be the primary option for at least a couple of days as national chains decide what they’re going to do.

“They’ve all taken a different approach. Some are saying that they’re waiting for the governor to lift the shelter in place order. Others are saying that they want to see how the other retailers have done. Some are waiting for anchors to open.”

Footlocker and Zumiez will open Friday. A massage space, barbershop and nail salon are all open despite warnings from their state licensing boards to remain closed. Shelton says the mall will follow the bi-county health officer’s orders to stay open, with mandatory social distancing or masks when that’s not possible.

Bi-county health officer Phuong Luu sent businesses throughout both counties a letter warning them to do better with wearing masks and social distancing. Otherwise they risk returning to stricter measures. Almost every store employee at the mall wore a mask, but less than half of shoppers did.