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Bay Area Headlines: Monday, 5/11/20, AM


California’s Budget Woes / Great Depression Level Unemployment / Open For Business, Again / Counties Impatient For Freedom / Stage Two Of Four To Recovery

California’s Budget Woes

Governor Gavin Newsom announced, last week, that the state faces a 54.3 billion dollar budget deficit through next summer. That could just be the tip of the iceberg.

Newsom’s estimate is based on what he was hoping to spend back in January. That budget is out the window, obviously, and his updated version is expected Thursday. Meanwhile, the nonpartisan Legislative Analyst's Office is out with its latest state budget analysis. It's spring fiscal outlook indicates a smaller short-term revenue shortfall than the governor's projection — more like 30 billion dollars.

But over the next four years, according to that office, the deficit could amount to anywhere between 64 billion to 126 billion dollars.

The LAO doesn't have a silver bullet for resolving the crisis. It’s suggesting lawmakers do what they can now to stave off an even worse public health crisis due to COVID-19.

It also encourages the Legislature not to postpone addressing long-term budget decisions, and to act in June ... not next year. The state assembly returned to work last week after a virus-related recess. The state senate returns today.

Great Depression Level Unemployment

On the docket for the state government: reversing what’s become an instant recession. The national unemployment rate is currently at 14-point-seven percent — the highest since the Great Depression. But the governor says that figure doesn't even represent the true number of those out of work. Newsom says four-point-three million people have applied for unemployment in California alone since mid-March and that's on top of those who were already out of work.

"When you add four-point-three million people to a workforce that's north of 18 million...do the math. We're not at 14-point-seven percent. The state of California is north of 20 percent right now."

Newsom delivered that message from a Sacramento flower shop that reopened Friday under the state's latest phase for economic recovery.

Open For Business, Again

While the state has moved to allow curbside service for many businesses, the six Bay Area counties of San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa, and Marin opted to keep a tighter rein on activity. They still maintain people should stay at home except for essential activities for another three weeks — until the end of May.

So, elsewhere, weekend shoppers could visit bookstores, as well as stores for jewelry, toys, clothing, shoes, home supplies and furnishing, sporting goods, antiques and music. People couldn’t browse but had to pick up purchases curbside. Car dealerships also got the nod, with some showroom restrictions.

Counties Impatient For Freedom

Two dozen counties — many of them small, rural populations with few coronavirus cases — they want to move faster than called for under Newsom’s four-phase reopening plan. The governor said the state will allow that under strict criteria based on the number of cases, deaths and tests.

But the state also sent a stern warning to three Northern California counties that have been defying his orders. Leaders in Yuba, Sutter and Modoc counties have allowed businesses to reopen that are outside the scope of Newsom’s plan, including dine-in restaurants, hair and nail salons and shopping malls.

On Friday, California’s Office of Emergency Services told Yuba, Sutter and Modoc they could lose federal disaster aid if they continued ignoring the governor’s order. The state Board of Barbering and Cosmetology, which issues permits for hair and nail services, similarly said it was warning violators they could lose licenses.

The Sutter County Board of Supervisors voted Saturday to pass a proposal telling the state the public health officer for the two counties attests they meet state criteria for broader reopening, according to the Appeal Democrat.

Stage Two Of Four To Recovery

The state of California is now in stage two of Newsom's four-phase process. The governor has provided a glimmer of hope that phase three, which would allow reopening of such businesses as nail salons, isn’t far off. That phase would also allow for the reopening of churches, movie theaters and some hospitality services. He said:

“It’s not six months away, it’s not even three months away. It may not even be more than a month away.”

To move more quickly to reopen restaurants, malls, office buildings, childcare facilities and services such as car washes and pet grooming, counties must demonstrate they’ve had zero deaths and just one case per 10,000 residents during a two-week stretch, as well as robust testing and tracing and an ability to house up to 15% of its unhoused population.

A Los Angeles Times analysis found that 95% of Californians live in counties that don’t yet meet those standards.