Good morning, California. It’s Wednesday, December 16.

Big budget deficits

Even as California cities face yawning budget deficits, many are still on the hook for raises promised to public employee unions — leaving local governments with little choice but to lay off employees or slash services.

With Congress gridlocked over a relief package, the cities of San Francisco and Los Angeles are facing projected budget deficits of $653 million and $675 million, respectively. Amid declining revenues and increasing pandemic costs, both cities attempted to negotiate with unions to defer raises — but have largely been unsuccessful. In August, the San Francisco Board of Supervisors voted to use $37 million in reserves to fund 3% raises for the majority of unions, and is on the hook for another 3% raise in July and 0.5% raise in January 2022. In Los Angeles, the police union is set to receive a 3.25% raise in January, while other unions will get a 2% raise in January and June.

The vast majority of California’s local governments are facing deficits. In 2010, 45 of California’s 58 counties had more money than they owed. But in 2020, 55 counties owed more money than they had, largely due to the compounding costs of public employee pensions and health benefits for retired workers, according to a recent analysis by former state Sen. John Moorlach, an Orange County Republican and certified public accountant. Moorlach’s analysis was based on pre-pandemic numbers, meaning counties’ budgets are likely even worse off now.

  • Moorlach: “Counties are slowly slipping in the wrong direction en masse. … And the failure to push … in the right direction will hit … hard as (they deal) with the coronavirus fallout.”

Still, layoffs loom for public employees. The Los Angeles Police Department is set to lose 628 positions as the city tries to patch its deficit — but the department’s largest union is fighting back. It’s asking members to donate $22 per paycheck for the next 48 weeks to launch a $10 million “Protecting our Profession” campaign targeting elected officials.

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The coronavirus bottom line: As of 9 p.m. Tuesday night, California had 1,617,370 confirmed coronavirus cases and 21,188 deaths from the virus, according to a CalMatters tracker.

Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.


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1. State short on health care workers

Health care workers at a Kaiser hospital in San Francisco on April 9, 2020. Photo by Anne Wernikoff for CalMatters

California is scrambling to find enough health care workers amid a surge in coronavirus hospitalizations that has left both Southern California and the San Joaquin Valley with less than 2% ICU capacity. Although the state has so far hired around 300 medical workers on temporary contracts, Gov. Gavin Newsom said in a Tuesday press conference that California needs about 3,000 to meet demand. He added that the state is “looking overseas” to recruit health staff and has requested 200 medical personnel from the federal Department of Defense. Only 21 members of the California Health Corps, Newsom’s $2.2 million initiative to grow the state’s health care workforce, are currently assisting with the surge — an indication of the program’s latest logistical snarl.

In a sobering moment, Newsom also said the state is working with its mutual aid morgue system and recently ordered 5,000 body bags as the seven-day average of deaths surged from 41 on Nov. 14 to 163 on Dec. 14.

  • Newsom: “We have to be mindful about how deadly this disease, this pandemic is.”

2. Homelessness counts may be delayed

A tent encampment in the Skid Row district of Los Angeles on Aug. 7, 2019. Photo by Anne Wernikoff for CalMatters

At least 17 California cities and counties, including Los Angeles and Sacramento counties, are seeking permission to skip a federally mandated count of their homeless populations, citing pandemic safety concerns. The biennial count, which determines the amount of state and federal funding allocated for homelessness, was set for January 2021. But if the requests are approved, the next mandated homeless count wouldn’t occur until 2023 — meaning the pandemic’s effect on homelessness may not be known for years. The lack of data could also make it difficult to evaluate the success of California’s many homeless programs, including Project Homekey, Newsom’s $800 million effort to permanently house the homeless.

However, the lack of specific numbers could potentially be a boon for Newsom, who staked much of his governorship pre-pandemic on addressing the crisis of the more than 150,000 Californians without a home. In September, 55% of Californians said Newsom had done a poor or very poor job of addressing homelessness, and 46% gave him low marks for handling housing costs.

3. Poverty, inequality on the rise

Image via iStock

Though low-income Californians have made substantial wage gains over the past five years — chipping away at the widening gap between the state’s haves and have-nots — the pandemic is likely to reverse much of that progress, according to a new report from the Public Policy Institute of California. To make matters worse, California’s monthly poverty rate was higher in October than it was in April, even though the unemployment rate decreased during that time, new research from Columbia University’s Center on Poverty and Social Policy shows. Taken together, the two sets of research paint an alarming picture of deepening poverty and inequality that could take the state years, if not decades, to surmount, CalMatters’ Jackie Botts reports. And though California lawmakers have already floated a list of solutions — including increased financial aid for college students and an expansion of the state’s low-income tax credit — many ambitious proposals will likely be reined in by fiscal realities in the spring.


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CalMatters commentary

CalMatters columnist Dan Walters: California is losing some of its highest-profile corporate residents to Texas, raising questions about the Golden State’s business climate.

Election results shatter stereotypes: No party preference voters will be the key to future victories or defeats, write Darry Sragow and Marva Diaz of the California Target Book.

Ratepayers at risk: The California Public Utilities Commission’s independent Public Advocates Office has apparently shifted its focus from protecting ratepayers to regulating the environment, argues Timothy Alan Simon of the CPUC.


Other things worth your time

Uber, DoorDash raise prices for California customers in the wake of Prop. 22. // Bloomberg

California workers appear likely to lose two weeks of paid sick leave. // Sacramento Bee

California releases guidelines for youth sports. // Mercury News

Will Disneyland create a ‘Disney Bubble’ to welcome visitors back to the park? // Orange County Register

Strip club still open while California vows legal action. // Associated Press

Los Angeles city attorney files multimillion-dollar lawsuit against underground nightclub. // Los Angeles Times

San Quentin doctors, lawyers question plan to transfer inmates amid outbreaks. // San Francisco Chronicle

Orange County sheriff refuses to release 1,800 inmates after judge’s order. // Fox News

Meet the state Legislature’s two new transportation leaders. // Streetsblog California

Meet Suely Saro, the first Cambodian American elected official in Long Beach history. // Los Angeles Times

U.S. Rep.-elect Young Kim discusses the California GOP after Trump. // New York Times


See you tomorrow.

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Emily Hoeven writes the daily WhatMatters newsletter for CalMatters. Her reporting, essays, and opinion columns have been published in San Francisco Weekly, the Deseret News, the San Francisco Business...