Good morning, California. It’s Monday, January 25.

Grant program under scrutiny

California’s economic recovery is trending in the wrong direction.

The Golden State’s unemployment rate grew to 9% in December, triggering the first month-to-month increase since April 2020, according to figures released Friday by the Employment Development Department. While the nation’s unemployment rate remained static in December, California’s rose 0.9% as the state shed 52,200 jobs — a staggering 37% of all U.S. jobs lost that month.

California’s economic recovery lags behind the country’s: Although the United States has regained nearly 56% of jobs lost since the pandemic hit, California has only recovered 44%.

California’s strict stay-at-home orders have exacerbated its growing divide between the haves and have-nots. The professional and business services sector gained 29,600 jobs last month, while the leisure and hospitality sector hemorrhaged 117,000 jobs and the “other services” sector, which includes hairdressers and nail salons, lost 11,000 jobs. The latter two sectors may not recover until 2025 or 2026, “if ever, given … accelerated automation and alternative sales channel development trends,” according to a report from the California Center for Jobs and the Economy.

The state is rolling out an unprecedented small business rescue plan, but owners say their survival will depend more on reopening rules and resolving unemployment chaos, CalMatters’ Lauren Hepler reports. A small number of businesses, unable to obtain or survive on loans, have decided to remain open in violation of health regulations.

Meanwhile, Gov. Gavin Newsom wants lawmakers to quickly approve $575 million in small-business grants, adding on to $500 million allocated last year. But the nonpartisan office that advises the state Legislature suggested it “defer action” on Newsom’s proposal, and raised numerous concerns about the program, including:

  • A lack of data on whether the grants are targeting the most impacted businesses and nonprofits.
  • A lack of clarity on how the state chose its third party-vendor, which received $25 million to administer the program.
  • A lack of information about the factors used to determine which applicants receive the grants.
  • Whether there are adequate measures in place to prevent fraud.

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The coronavirus bottom line: As of Sunday, California had 3,109,151 confirmed cases (+0.8% from the previous day) and 36,790 deaths (+1.2% from previous day), 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.


Check out the California State of Mind podcast, co-produced by CalMatters and CapRadio. This episode, we discuss how California could influence the Biden administration’s environmental policy and why the vaccine rollout is so confusing.


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1. Newsom expected to lift stay-at-home order

Newsom at a news conference in Sacramento on Jan. 8, 2021. Photo by Rich Pedroncelli, AP Photo/Pool

Newsom is expected to lift the regional stay-at-home order today, allowing outdoor dining and gym-going to resume and hair salons to reopen in the Southern California, Bay Area and San Joaquin Valley regions for the first time since December, two sources close to the governor told Politico late Sunday night. (Greater Sacramento and Northern California had already exited the stay-at-home order.) The three regions would then re-enter, as separate counties, the most restrictive purple tier of the state’s previous reopening plan. Counties can impose tougher rules, like banning outdoor dining, if they so choose. This could be the case in Los Angeles County, a national epicenter of the virus that had 0% ICU capacity as of Saturday.

Politico’s sources said Newsom plans to lift the stay-at-home order because the three regions are projected to have ICU capacity above 15% in the next four weeks. But on Friday, the Associated Press reported that the governor’s administration won’t publicly share those projections because doing so “would mislead and create greater uncertainty for Californians,” in the words of California Health and Human Services Agency spokeswoman Kate Folmar.

Adding to the confusion, the state Department of Public Health has since Jan. 16 included the following sentence in its press releases: “Re-entry framework for a region that has recently exited the Regional Stay at Home Order is being finalized.” The sentence presumably refers to Greater Sacramento, which exited the order on Jan. 12, and suggests it was actually about to return to the stay-at-home order — the direct opposite of Newsom’s expected announcement.

2. Newsom’s school plan appears doomed

A ‘school closed’ sign at Edna Brewer Middle School in Oakland on Aug. 25, 2020. Photo by Anne Wernikoff for CalMatters

Unless significant changes are made to Newsom’s $2 billion school reopening plan, the state Legislature is highly unlikely to approve it — delaying campus reopenings yet again for millions of K-12 students, the Los Angeles Times reports. The extent of distaste among school leaders and lawmakers was apparent in a three-hour Thursday hearing, in which educators expressed frustration with the plan’s changing health guidelines, extremely tight timetable for union negotiations and new requirements that could actually end up costing districts more than they receive in grant money. (In yet another wrinkle, the grants come from funds the schools would have received anyway.) Although school districts must submit a reopening plan to the state by Feb. 1 if they want to participate in Newsom’s proposal, it appears few — if any — will do so.

Another legislative hearing on the topic is scheduled for tomorrow.

3. More changes to vaccine rollout?

Army medic Jenny Rafailov fills a syringe at the COVID vaccination site at Cal Expo in Sacramento on Jan. 21, 2021. Photo by Anne Wernikoff, CalMatters

Another wrench could potentially be thrown into California’s chaotic vaccine rollout: State health officials are considering shifting to a priority system based primarily on age, a change they say would streamline the vaccination process but which could also move younger essential workers farther down the list, the San Francisco Chronicle reports. The state is also considering using an equity metric based on income, education and health care levels to determine vaccine allocation.

It seems unlikely the proposed changes would create a uniform system across the state. Although California permits anyone 65 and older to receive the vaccine, counties, cities and providers have their own requirements based on available vaccine doses — creating a confusing patchwork for many residents, CalMatters’ Barbara Feder Ostrov reports. The state last week quietly launched a statewide website to help centralize information, but it currently can only be used to schedule appointments for health care workers and people 65 and older in Los Angeles and San Diego counties, Barbara reports.


CalMatters commentary

CalMatters columnist Dan Walters: California is conducting an immense sociological experiment to test whether reducing prison time will ultimately result in less crime.

Reopen schools now: Newsom, the Legislature and local leaders must prioritize California’s most precious constituency — kids, argues Ted Lempert, president of Children Now.

Two strategies for an equitable recovery: California must target critical support to those most in need and help people climb the economic ladder, write Sarah Bohn, Dean Bonner and Vicki Hsieh of the Public Policy Institute of California.


Other things worth your time

California spent $19 million on Capitol security amid fears of unrest during inauguration. // Associated Press

What former California Gov. Jerry Brown could teach Joe Biden. // New York Times

California attorney general launches civil rights probe of Los Angeles County Sheriff’s Department. // Los Angeles Times

Young ‘vaccine chasers’ crowd unofficial standby lines in hope of a shot. // Los Angeles Times

How many Californians are at risk of eviction? Depends who you ask. // CalMatters

Why San Francisco is one of California’s most conservative cities when it comes to housing. // San Francisco Chronicle

California trial courts to get $25 million to tackle COVID-19 backlog. // Sacramento Bee

California’s ban on indoor worship upheld, but future caps on church services in limbo. // Sacramento Bee

California’s ban on flavored tobacco sales blocked as referendum qualifies for ballot. // Los Angeles Times

San Diego resumes efforts to create city-run public bank. // San Diego Union-Tribune


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...