Web Version [link removed] | Update Preferences [link removed] CBRT in the News California POLITICO Playbook: March 25, 2020

THE BUZZ: As the confirmed coronavirus cases inexorably climb and California scrambles to prepare for the hospital-straining surge, it feels increasingly like President Donald Trump — and some governors — inhabit a different reality.

The president reiterated his hope Tuesday that we can soon start easing off restrictions, setting a “beautiful” target of Easter for Americans to begin gathering en masse again and suggesting that “the end of our historic battle with the invisible enemy” is within sight. And Republican Florida Gov. Ron DeSantis scoffed at the types of constraints California and other states are imposing on public life even as walled off his state to travelers incoming from the mid-Atlantic.

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QUOTE OF THE DAY: “Today, Governor Gavin Newsom announced that the FY 20-21 budget will essentially ‘shelter in place.’” California Business Roundtable chair Rob Lapsley on Newsom’s plans for a more austere budget.

TWEET OF THE DAY: @RepBarbaraLee on trusting the experts: “I’ve worked closely with Dr. Fauci for years – he's truly the best of the best. Pro tip: listen to his medical advice, not Trump’s.”

BONUS TWEET OF THE DAY: @ElonMusk: “Yup, China had an oversupply, so we bought 1255 FDA-approved ResMed, Philips & Medtronic ventilators on Friday night & airshipped them to LA. If you want a free ventilator installed, please let us know!

Read More [[link removed]] Coming Recession Will End Decade-Long Boom And Test California’s Resiliency

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.

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“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.”

Read More [[link removed]] Business Climate and Job Creation Coronavirus Measures Could Cut Economic Activity By A Quarter, Report Says

Measures taken to curb the spread of the new coronavirus could lower economic activity in the U.S. and other developed countries by a quarter, the Organization for Economic Cooperation and Development said Friday.

In a report made available to leaders of the Group of 20 leading economies for a video conference they held Thursday, OECD economists estimated the likely impact on the sectors most affected by widespread business closures and orders for people to remain at home, and the size of those sectors in each national economy.

The OECD calculated that the activities most directly affected by the shutdowns—ranging from restaurants to automobile makers—account for between 30% and 40% of total output in most of the developed economies. With activity in many of those sectors curtailed, it calculated that output was likely to be between 20% and 25% lower than is usual in large, developed economies.

Read More [[link removed]] House Passes $2 Trillion Coronavirus Stimulus Package

The House was hoping to pass quickly a $2 trillion stimulus package despite a Republican lawmaker’s insistence that his colleagues go on record in favor or against the legislation, a vote that would delay passage.

Rep. Thomas Massie (R., Ky.) tweeted that he would object to a voice vote and try to force a formal roll-call vote, following a threat he had made a day earlier that sent lawmakers scrambling to get back to Washington in an effort to assemble the 216 members needed for a quorum. That threshold was reached Friday morning.

“I swore an oath to uphold the constitution, and I take that oath seriously,” Mr. Massie tweeted. “Is it too much to ask that the House do its job, just like the Senate did?”

Leaders from both parties had wanted to pass the legislation quickly through a voice vote, and aides expressed confidence that the House could overcome his objections and avoid a roll-call vote. Lawmakers spread themselves throughout the chamber, spilling into the gallery normally reserved for the public.

Read More [[link removed]] Spend Generously, Take Care Of Workers: Coronavirus Stimulus Takes Lessons From TARP

It took deeply unpopular bailouts costing hundreds of billions of dollars to help end the most-recent economic crisis. Policy makers swore they’d never do it again. “There will be no more tax-funded bailouts—period,” then-President Obama declared in 2010.

A decade later, they’ve done it again. Late Wednesday, the Senate passed an even bigger package of bailouts and stimulus to address the coronavirus pandemic, with a speed and degree of consensus that was largely absent in the last episode. The House of Representatives is expected to pass the legislation as soon as Friday, and the White House has said President Trump would sign the law immediately.

What changed? Veterans of the last go-round say the underlying causes and thus the politics of the crises are completely different. The prior bailouts went to banks and financiers, who were blamed for helping cause the crisis, but who needed saving because they were essential to providing credit to the mainstream economy, from Fortune 500 companies to mom and pop stores.

Read More [[link removed]] Construction Companies Lobby To Keep Working As Coronavirus Spreads

The construction industry is pushing to keep projects up and running while state and local governments shut down other sectors to slow the spread of the coronavirus.

In Washington, D.C., and in state capitals, industry groups are lobbying to designate construction workers as essential personnel exempt from stay-at-home orders. The industry employs 7.6 million Americans, or 5% of the workforce.

The effort has seen some success. New York, Illinois and California have deemed construction essential. Pennsylvania, on the other hand, has ordered building sites to close except for those involving health-care facilities. Washington state also has designated most commercial and residential construction as nonessential.

Last week, industry groups and the U.S. Chamber of Commerce wrote to President Trump, urging his administration to exempt construction workers from local quarantine orders.

Read More [[link removed]] Record Rise In Unemployment Claims Halts Historic Run Of Job Growth

A record 3.28 million workers applied for unemployment benefits last week as the new coronavirus hit the U.S. economy, marking an abrupt end to the nation’s historic, decadelong run of job growth.

The number of Americans filing for claims was nearly five times the previous record high. The surge was for the week ended March 21 and could rise further. Pennsylvania, Ohio and California were among 10 states reporting more than 100,000 claims, leaving unemployment systems overloaded.

Millions of U.S. businesses have announced layoffs or furloughs, as their cash flows dry up. Several state and local authorities have ordered nonessential businesses to close in response to the novel coronavirus pandemic, bringing the great American job machine to a sudden halt.

Read More [[link removed]] Jobless Claims Smash Record

A record 3.28 million Americans filed unemployment claims last week, according to the Labor Department, as the economic impacts of the novel coronavirus outbreak rippled across the global economy.

The previous weekly record was 695,000 in October 1982. The peak during the Great Recession was 665,000 in March 2009.

Two weeks ago, which reflected the period before the worst of the coronavirus hit, there were 282,000 claims.

Pennsylvania’s non-seasonally adjusted claims rose twentyfold while New York’s claims quintupled and California’s tripled, according to the states’ reports.

“This large increase in unemployment claims was not unexpected, and results from the recognition by Americans across the country that we have had to temporarily halt certain activities in order to defeat the coronavirus,” Labor Secretary Eugene Scalia said in a statement.

Read More [[link removed]] How Will The Federal Stimulus Help Californians?

Today, the House is poised to approve the biggest economic stimulus package in modern American history, a $2 trillion plan aimed at helping Americans through the Covid-19 pandemic, just as the United States finds itself at its center.

And for the millions of Americans who have lost work — including more than one million Californians — the relief can’t come quickly enough.

On Wednesday, Gov. Gavin Newsom said that according to early estimates, the legislation would send more than $10 billion just to California and communities around the state, not including direct support to residents.

That money, he said, will help hurting state coffers as California spends billions of dollars on protective equipment and places to house people who must be isolated or who had been living on the streets.

Read More [[link removed]] California School Lessons On Hold As Districts Negotiate With Teachers Unions

Nearly two weeks after schools across California closed without warning due to the coronavirus, many districts are stuck in neutral until labor negotiations get hashed out.

Teachers unions across the state are demanding rules for distance learning obligations, holding up at-home lessons for students — especially in districts that already had fractured labor relationships.

"These important emergency declarations have not suspended obligations to negotiate with unions," California Teachers Association spokesperson Claudia Briggs said.

Briggs said there have been “great examples of collaboration” between administrators and unions ever since districts en masse announced they would cancel classes weeks ago. Natomas Unified in Sacramento and San Diego Unified are among those that have reached agreements with their teachers to launch distance learning programs.

Read More [[link removed]] All Eyes On San Francisco Bay Area As Nation's Social Distance Bellwether

The nation's grand social distancing experiment began 10 days ago in the San Francisco Bay Area, where health officials imposed the first shelter-in-place orders in a desperate bid to slow the spread of coronavirus.

California Gov. Gavin Newsom followed suit days later, touching off a cascade of states that imposed "stay at home" directives from New York to Louisiana.

The big question now: How will health experts know when Covid-19 infections are leveling off — and when will they feel confident enough to thaw restrictions? A lack of widespread testing and the novel biology of the virus pose challenges to deciphering the growth curve in the coming weeks.

The Bay Area will serve as a bellwether for when cities and states across the nation can emerge from hibernation — and the extent to which they can return to normal life. Besides being the tech capital of the world and home to cutting edge biomedical research, the region of 7 million people has everything from the cosmopolitan high-density city of San Francisco to expansive suburbs and rural enclaves, all in relative proximity.

Read More [[link removed]] Coronavirus Threatens To Wipe Out California's $21-Billion Surplus. And It Could Get Worse

For more than six years, through two governors and hundreds of lawmakers’ votes, California’s state government slowly built the largest cash reserve in its history — projected to total $21 billion by next summer.

But there are growing fears that the fast-moving crisis sparked by the coronavirus pandemic could force it to be spent in a matter of months.

A number of the state’s most experienced budget watchers now expect that California might need to use the entire cash surplus, and possibly much more money, to prop up vital government services that could be severely underfunded by a quickly collapsing economy.

“This is a sudden downturn unlike anything we’ve seen,” said Gabriel Petek, the state’s legislative analyst. “We’re kind of flying blind at this point.”

Read More [[link removed]] California Tells Agencies Not To Expect Full Funding Next Year

California is telling its departments and agencies not to expect funding for new initiatives next year as it gears for the hit of the coronavirus pandemic to state revenue.

Governor Gavin Newsom’s administration is in the midst of updating its proposed budget for the year that begins in July. While in recent years the budget revision has resulted in new programs being added compared with the initial spending plan presented in January, the administration is warning in letters to department heads Tuesday that it’s evaluating requests with the minimum needed to maintain services and meet mandates as the baseline.

The only exception is for measures needed to respond to the virus outbreak, which prompted the governor last week to order the state’s 40 million residents to stay home except for essential activities.

“Despite the sustained efforts, the virus continues to spread and is impacting nearly all sectors of California’s economy. Among these impacts is a severe drop in economic activity, with corresponding negative effects on anticipated revenues,” Newsom’s finance department said in the letter. “The impact on revenues could be immediate, affecting the 19-20 fiscal year, and will certainly produce impacts for the upcoming 2020-21 fiscal year and beyond.”

Read More [[link removed]] Drivers Say Uber And Lyft Are Blocking Unemployment Pay

In a typical week, Jerome Gage, a Lyft driver in Los Angeles, makes $900 to $1,000 before expenses during roughly 50 hours on the road. This week, with most of the state holed up and demand for rides evaporating, he expects to work even longer to make far less than half that amount.

Given the option, Mr. Gage said, he would stop wasting his time and risking his health and file for unemployment benefits. But unlike workers employed by restaurants, hotels and retail establishments, gig workers like Uber and Lyft drivers typically have not been able to collect unemployment benefits or take paid sick leave.

In a call with analysts last week, the Uber chief executive, Dara Khosrowshahi, alluded to the problem, suggesting that his hands were tied because Uber drivers are independent contractors. “This situation certainly demonstrates the downside of attaching basic protections to W-2 employment,” he said.

Read More [[link removed]] Energy and Climate Change California Sets Electric Sector GHG Emissions Target 56% Below 1990 Levels, But Leaves Room For More

The 46 MMT target reflects a 56% decrease in emissions compared to 1990 levels, and requires significant build-out of new capacity; the state is looking to procure 25,000 MW of additional renewables by 2030, including doubling California’s currently installed utility-scale solar capacity and adding 8,900 MW of battery storage —​ about eight times the nation's battery capacity levels in 2018.

However, several stakeholders felt the target didn’t go far enough. In comments filed with the CPUC, Southern California Edison said it has "significant concerns" about reaching the state’s carbon neutrality goals and urged the agency to instead adopt a 38 MMT target. Several renewables and environmental groups, including the Environmental Defense Fund and American Wind Energy Association California, also wrote to Gov. Gavin Newsom, D, contending that the CPUC "is poised to reverse course on state climate policy" and asking instead for a emissions target of 30 MMT.

One of the reasons that the groups opposed a 46 MMT target is because of Senate Bill 100 — California legislation that sets the state on the path to carbon neutrality by 2045 —​ Michael Colvin, director of regulatory and legislative affairs at the Environmental Defense Fund’s California energy program and one of the signatories to the letter, told Utility Dive. The state would be "essentially backloading all the remaining emissions reductions to that last bit of time, from 2030 to 2045.​ You’re essentially taking out the first 10 years of additional runway that you had," he said.

Read More [[link removed]] California Approves Climate Change Target That Critics Say Is Far Too Weak

State officials signed off Thursday on a climate change target that critics say will reduce planet-warming emissions far too slowly. The action comes as economic disruption caused by the COVID-19 pandemic is expected to slow the growth of renewable energy.

Meeting via video conference to protect against the novel coronavirus, the five-member California Public Utilities Commission unanimously approved a plan that aims to cut power-plant emissions by about 25% over the next decade — a slower pace than those emissions fell during the previous decade. The commission had studied a plan to cut power-sector emissions in half but ultimately concluded the less aggressive target would keep California on track to meet its goal of 100% clean electricity by 2045.

Commissioner Liane Randolph described the agency’s decision as plenty ambitious. She said it would require California to roughly double its fleet of solar panels, wind turbines and lithium-ion batteries by 2030, dramatically reducing the use of fossil fuels.

Read More [[link removed]] How Big Plastic Is Using Coronavirus To Bring Back Wasteful Bags

The plastic industry is not going to waste a crisis.

In January, when the world was still awakening to the novel coronavirus, the plastic bag manufacturer Novolex warned that the outbreak in China would lead to paper-bag shortages, and that cities’ plastic bag bans could cause supply-chain disruptions. By late February, that narrative had taken a turn. When community spread of COVID-19 cases in the United States looked to be inevitable, companies found a new culprit for the spread of the coronavirus: reusable bags.

On February 28, the libertarian think tank Competitive Enterprise Institute posted on its website, “Whether reusable bags could become a significant carrier of the coronavirus remains to be seen, but there are good reasons to fear they will harbor other equally dangerous bacteria and viruses transmitted from carrying meat and produce.” Later in March, John Tierney, a former New York Times columnist and climate change skeptic, wrote in an op-ed at City Journal, a publication of the conservative think tank Manhattan Institute, “Reusable tote bags can sustain the Covid-19 and flu viruses—and spread the viruses throughout the store.”

Read More [[link removed]] What The Coronavirus Curve Teaches Us About Climate Change

The coronavirus pandemic—sadly—has introduced or reintroduced many people to the concept of an exponential curve, in which a quantity grows at an increasing rate over time, as the number of people contracting the virus currently is doing. It is this curve that so many of us are trying to “flatten” through social distancing and other mitigating measures, small and large.

It’s easy to project a pattern of smooth, linear growth: one person gets the coronavirus today, another person contracts it tomorrow, a third person gets it on the third day, and the process continues in this manner, the cases simply adding. But most people, including leaders and policymakers, have a harder time imagining exponential growth, which means you can have two cases of coronavirus tomorrow, four on the third day, hundreds after the seventh day and thousands soon after—a situation that’s challenging to anticipate and manage. That’s the nature of pandemics.

It’s also how climate change works. And if there’s any silver lining in this mess, it’s that the coronavirus pandemic is teaching us a valuable lesson about the perils of ignoring destructive processes—and perhaps even larger, longer-term disasters—that increase exponentially. Even if growth looks mild in the moment—think of the earliest segments on an exponential curve like the red line shown in the illustration above—it will soon enough be severe. In other words, delay is the enemy.

The human mind does not easily grasp the explosive nature of exponential growth. This was demonstrated more than 40 years ago in a series of pioneering psychological experiments conducted in the Netherlands by Willem Wagenaar and his colleagues. In one study, participants were shown a hypothetical index of air pollution beginning in 1970 at a low value of 3 and rising yearly in an exponential way to 7, 20, 55 and, finally, 148 by 1974. Asked to intuitively predict the index value for 1979, many of the respondents produced estimates at or below 10 percent of the correct value of about 21,000 (which can be determined from the underlying exponential equation). Subsequent experiments have observed similarly dramatic underestimation of exponential growth and showed that it typically results from straight-line projections based on early small increases.

Read More [[link removed]] Infrastructure and Housing Coronavirus And Rent: California Tenant Advocates Say Statewide Break Is Needed

While California homeowners affected by the coronavirus outbreak are set to receive mortgage relief, tenant advocates say Gov. Gavin Newsom has not done enough to protect renters at risk of losing their homes.

With April rents coming due, lawmakers and activists are redoubling their push for a statewide eviction moratorium that would aid tenants who have lost their jobs as the economy grinds to a halt.

Newsom has urged local governments to take up the issue, and he signed an executive order last week that he said removed legal hurdles for them to act. Statewide action is possible, he suggested during a news conference Wednesday, but it is far more complicated than it may appear.

“We are very concerned about what’s happening or not happening at the local level,” Newsom said. “If we don’t see things materialize and manifest in very short order, we reserve the right to look at a state overlay.”

Read More [[link removed]] California's Renters And Landlords Are 'Just Scared' As Job Losses Mount From Coronavirus

Catherine Alvarez is not working and on disability. Her husband was just laid off from his job as a quality control specialist. Her son’s hours recently got cut at a fast-food restaurant.

Now, Alvarez is worried how they’re going to pay rent.

“If I cover the amount of the rent, I’m not going to be able to buy food,” said Alvarez, 34, whose family lives in a two-bedroom apartment in Downey. “We’re not sure what to put first before we run out of money.”

In recent weeks, the spread of the novel coronavirus has prompted public health officials to close businesses and force Californians to stay in their homes, leading to economic devastation for those who’ve lost jobs and hours at work.

Read More [[link removed]] Chronically Ill And Facing Eviction During A Pandemic

Presley Wilson is a single mom of a 4-year-old who lives in a travel trailer in Pomona. "It's 26 feet, and with two people and two dogs. And so it's packed," she told me by phone earlier this week.

Wilson drives for Lyft as her main source of income. Her bank account rises and falls with her ability to drive — something she said she lost when the coronavirus arrived in California.

That's because Wilson is chronically ill, with two syndromes affecting her blood circulation. They can also exacerbate other illnesses: "It's dangerous for me to get sick because I get super, super sick," she said.

She stopped driving in February, worried that picking up passengers at LAX might expose her to COVID-19.

No income meant she didn't have rent for March. And so, on Mar. 17, the "three day notice to pay rent or quit" arrived at Wilson's door. It detailed the hole Wilson found herself in — she owned $625 in rent for this month, along with another $132.47 in electricity, water, sewer and trash bills.

Read More [[link removed]] California Saw Dense Housing Near Transit As Its Future. What Now?

As Californians grow accustomed to 6-foot social distancing, the coronavirus could have a chilling effect on the state's efforts to build more apartments near public transportation to solve its housing crisis.

Gov. Gavin Newsom and Democratic leaders have championed urban housing as a way to address the ever-rising cost of living in California. They prefer that approach over continuing the state's legacy of expanding freeways and suburbs that take advantage of California's vast geography — which has led to emissions pollution and neighborhoods in wildfire zones.

The Democrats' argument had been gaining traction, especially among younger residents desperate for cheaper housing and less inured to car ownership. It was also a weapon in Newsom's fight against homelessness, a sore subject that for months incurred the wrath of President Donald Trump.

But the coronavirus will likely stand in the way of that momentum. Opponents of infill and transit-oriented development are blaming population density as a primary factor behind the pandemic's spread in urban areas, largely based on New York City's exponential increase in coronavirus cases and deaths. New York Gov. Andrew Cuomo conceded as much this week when explaining why the virus has been found in 15 times as many New Yorkers as Californians so far.

Read More [[link removed]] Coronavirus Will Make California's Affordable Housing Problems Worse, Experts Say

California already faced a shortage of more than 1 million homes for low-income families before the novel coronavirus hit. And now many advocates, economists and politicians say the pandemic is only going to make the situation worse.

Major job losses, particularly in low-wage restaurant and hospitality sectors, and what will probably be severely depressed tax revenues for California and its cities, could create an even greater need for affordable housing at a time when government has less money available to help finance it.

“There’s all these households that are one paycheck away from not being able to pay their rent,” said Carolina Reid, faculty research advisor at UC Berkeley’s Terner Center for Housing Innovation. “Well, now that paycheck is gone. And there’s no prospect for when that paycheck is coming back.”

On Thursday, Gov. Gavin Newsom ordered all 40 million Californians to stay at home — with limited exemptions for crucial businesses, such as grocery stores — to slow the spread of the coronavirus. While many people are now working from home, that option isn’t available to restaurant and hospitality workers, who have lost jobs and seen their hours cut as food service is limited to grocery stores, and takeout and delivery services.

Read More [[link removed]] Editorial and Opinion Virus Attacks California Budget Measures

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.

Read More [[link removed]] Gov. Newsom, Here's A Coronavirus Moment To Meet: Help Sacramento Teach Our Kids At Home

A lot of people are very impressed with how California Gov. Gavin Newsom has responded to the coronavirus outbreak. And why not?

As always, Newsom looks great. He sounds great. There is never a hair out of place. And only this dude could wear out the same phrase over and over again – how we need to “meet this moment” – without getting trashed for it.

Newsom’s heart is in the right place and his political and show biz instincts are big league. And let’s face it, Newsom looks far more presidential than the current occupant of the Oval Office.

But in some fine details of how we need to move critical jobs to our homes is where Newsom is found wanting.

Read More [[link removed]] California Business Roundtable 1301 I Street, Sacramento, CA 95814 916.553.4093 | [[link removed]] Web Version [link removed] | Update Preferences [link removed] | Unsubscribe [link removed]