Newsom set to unveil revised budget. Feds deny approval for N95 masks from Chinese firm. How much state unemployment fund lost from Uber, Lyft.
Good morning, California. It’s Thursday, May 14.
Budget deficit, pandemic and wildfires, oh my
We know things are bad. Today, when he proposes a revised state budget, Gov. Gavin Newsom will tell us a bit more about how bad things really are.
In January, the governor proposed an ambitious $222 billion budget with a surplus of nearly $6 billion. Now his budget needs to account for a deficit he estimated at $54 billion.
- Newsom on Wednesday: “Our values will not change. The numbers have radically changed. … We couldn’t do everything we proposed in January. You’ll see that as a general theme tomorrow, and there are some sobering and deep challenges that we have to address head-on.”
Legislators will then debate Newsom’s proposal. They need to reach an agreement by June 15, when they are constitutionally bound to pass a budget. But since the state won’t know its total revenues until July — when deferred income and sales tax payments come in — the budget will likely be revised again later.
But it isn’t just massive cuts on the horizon.
Tuesday, Senate Democrats unveiled a series of proposals to increase state support for renters, homeowners and landlords amid the pandemic.
And Wednesday, Newsom proposed a roughly $300 million increase for the state’s emergency and disaster response, not including 12 Black Hawk helicopters at $24 million a pop to help fight wildfires — which are up 68% from this time last year.
- Newsom: “The hots are getting hotter, the drys are getting drier, the wets are getting wetter. There’s a new reality. For those that don’t believe in climate change or science … come to California. Visit us. Learn about climate change firsthand, because even if you deny it, your own eyes may tell you something very, very differently.”
The Bottom Line: As of 9 p.m. Wednesday night, California had 73,125 confirmed coronavirus cases and 2,971 deaths from the virus, according to a Los Angeles Times tracker. (These numbers are different from those of the state Department of Public Health, which are updated less often.)
Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.
Other stories you should know
1. Feds deny approval of N95 masks made by BYD — the company CA has a $1 billion contract with
The Wall Street Journal reported Wednesday that federal authorities on May 4 denied approval of N95 masks made by BYD, the Chinese company with which California signed a $1 billion contract for a monthly shipment of 200 million masks. This contradicts Newsom’s explanation for why BYD hasn’t yet sent California any N95 masks, the Sacramento Bee reports. “We needed some certification from federal (regulators) for these N95 respirator masks. That’s been delayed a little bit,” the governor said last week.
A spokeswoman for the National Institute for Occupational Safety and Health told the Sacramento Bee, “The certification of the BYD device was not delayed, NIOSH made the decision to deny the approval based on a number of factors.”
BYD has already refunded California $247.5 million for not meeting the agreed-upon federal certification deadline for the N95 masks. California signed the massive deal with BYD after it sent $457 million to a 3-day-old medical-supply company, only to claw back the money hours later.
2. Uber and Lyft would have paid >$400 million for unemployment insurance if drivers were classified as employees, report finds
Uber and Lyft would have paid $413 million into California’s unemployment insurance fund between 2014 and 2019 if their drivers had been classified as employees rather than independent contractors, according to a recent report from UC Berkeley’s Institute for Research on Labor and Employment. Meanwhile, California borrowed $348 million from the federal government last week to help pay for its skyrocketing unemployment insurance claims (there were roughly 4.1 million as of last Thursday).
Also last week, California’s attorney general and the city attorneys of Los Angeles, San Diego and San Francisco sued the ride-hailing giants for refusing to classify over half a million drivers as employees. “At the end of the day, no business model should hang its success on mistreating its workers and not playing by the rules,” Attorney General Xavier Becerra said.
3. Many seniors still not getting fed three weeks after Newsom unveiled free meal-delivery program
Newsom’s plan to deliver free restaurant meals to vulnerable seniors is slowly getting off the ground after a rocky start three weeks ago, when tens of thousands of residents tried to sign up for a program local governments didn’t yet know existed. Federal funding was extended through June 10, and a patchwork of 39 cities and counties have begun offering the meals or plan to. But in many places, seniors are still facing logistical challenges, including full voicemail boxes, uninformed 211 operators and “coming soon” webpages.
- Diane Gonzalez, 63, the sole caretaker for her 92-year-old parents in unincorporated Los Angeles County, received a typo-laden email from the county incorrectly stating that they didn’t qualify because they live in the city of Los Angeles.
- Sheila Kern, 66, lives alone in an unincorporated part of Monterey County and has called 211 repeatedly to join the program. Each time, she gets a recording: “The program is still being worked on.” “I was so disgusted,” she said. “It almost feels like something was rolled out incompletely.”
4. Is California aquaculture over before it really began?
It turns out that trying to develop a shellfish farm more than twice the size of Central Park in federal waters off the coast of California is an extremely complicated endeavor. This week, legislation stalled that would have given the Ventura Port District authority to build a 2,000-acre sea farm in federal waters. The fledgling aquaculture industry is still reeling from the failure of the nation’s first sea farm in federal waters off Huntington Beach, which attempted to provide a national model for sustainable aquaculture but suffered when broken equipment caused the death of a 70-year-old man last year, CalMatters’ Julie Cart reports.
- Diane Windham of the National Oceanic and Atmospheric Administration: “Until we get something permitted and in the water we can’t validate our assumptions. It has to start on a small scale — get a farm in the water and monitor the heck out of it. We need that leap of faith.”
CalMatters virtual events
Tuesday at 1 p.m.: How Nursing Homes Need to Change. CalMatters discusses how nursing homes are handling the coronavirus outbreak with Craig Cornett, CEO of the California Association of Health Facilities, Michael Dark, staff attorney at California Advocates for Nursing Home Reform, and Dr. Michael Wasserman, president of the California Association of Long Term Care Medicine. Register here and submit your questions here.
CalMatters columnist Dan Walters: A perennial issue in the state Legislature is the scope of personal injury lawsuits, known to insiders as “tort wars.” This year’s skirmish is over suing alleged tax cheats. Ultimately, raw politics, not facts or logic, will determine the outcome.
Yes on November initiative to modify Prop. 13: Californians simply can’t afford corporate tax loopholes at the expense of our critical local services, frontline workers and schools, writes Oakland Mayor Libby Schaaf.
Beware of Trojan Horse in two Assembly bills: California legislators need to understand the ramifications of the Eagle Mountain hydroelectric project near Joshua Tree National Park, argue Barry Moline of the California Municipal Utilities Association, Neal Desai of the National Parks Conservation Association and Michael Boccadoro of the Agricultural Energy Consumers Association.
Imperative to invest in online infrastructure: California needs to continue to invest in community colleges as classes and student services are transitioned online, writes Eloy Ortiz Oakley, chancellor of California Community Colleges.
Other stories you should know
Alameda County strikes a deal with Elon Musk to reopen Tesla factory — but it’s the same deal it was before. // The San Francisco Chronicle
Mike Garcia clinches California congressional seat in special election, the first time since 1998 that a Republican has flipped a Democratic-held seat. // The New York Times
Community colleges could see athlete influx as coronavirus disrupts sports recruiting. // CalMatters College Journalism Network
Stanford study of coronavirus in Santa Clara County releases revised results. // The Mercury News
California pharmacies given the go-ahead to test for coronavirus. // The San Francisco Chronicle
Two reasons why coronavirus deaths aren’t decreasing in California. // The Los Angeles Times
People who turn down their old job or a new one due to coronavirus concerns may still be able to collect unemployment insurance. // The San Francisco Chronicle
UC system aware of more than 200 campus incidents involving police use of force in recent years, yet it has only made two public. // Voice of San Diego
See you tomorrow.
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