Gov. Gavin Newsom on Tuesday unveiled a $4.5 billion plan for business and job recovery, dedicating one-third of the funding to eliminating new gas-powered cars by 2035.

The plan offers a glimpse into Newsom’s priorities for the 2021-22 budget, which will be released in full on Friday, kicking off months of negotiations with the Legislature. However, Newsom wants lawmakers to immediately approve nearly $1 billion — mainly for small businesses and housing — when they return to Sacramento on Monday. Legislative leaders seemed amenable to this request, even as they emphasized that they had proposals of their own — signaling they don’t want a repeat of last session, when many felt their role was reduced to “simply giving a yes or no answer to the governor’s priorities,” in the words of then-state Sen. Holly Mitchell, a Los Angeles Democrat.

Here’s a closer look at Newsom’s recovery package:

  • $1.5 billion for constructing electric charging and hydrogen fueling stations, and subsidizing purchases of zero-emissions cars
  • $777.5 million for job creation and retention
  • $575 million in small-business grants (on top of $500 million allocated last year)
  • $500 million to build more than 7,500 permanently affordable homes
  • $353 million for workforce development
  • $300 million for deferred maintenance of state properties
  • $70.6 million for fee waivers for businesses and individuals impacted by the pandemic

Whether the package will satisfy financially ravaged businesses — and frustrated Californians — remains to be seen. Former San Diego Mayor Kevin Faulconer, who recently launched a gubernatorial exploratory committee, excoriated Newsom’s proposal Tuesday.

  • Faulconer: “In the middle of a pandemic and deep recession, California’s highest priority should not be zero-emission vehicles. We need K-12 education at the top of the list.”

Also expected in Newsom’s budget proposal: $2 billion to accelerate school reopenings and $300 million for vaccine distribution.

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The coronavirus bottom line: As of Tuesday, California had 2,452,334 confirmed cases (+1.3% from previous day) and 27,003 deaths (+1.4% 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.


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1. Projected EDD fraud hits $4 billion

Image via iStock

The Tuesday revelation that California’s beleaguered unemployment department may have paid nearly $100 million in fraudulent claims to out-of-state jail and prison inmates has pushed the projected scope of fraudulent payments to $4 billion — double the amount prosecutors had previously estimated. According to an analysis reviewed by the Los Angeles Times, more than 2,000 of the high-risk claims were filed under the names of inmates in Florida prisons or jails — including that of a convicted murderer who allegedly received nearly $11,000 in payments. The news came a day after EDD suspended payment on an unspecified number of claims in an attempt to mitigate fraud — and a Sacramento man on probation was charged with nine counts of felony EDD fraud after scamming the department for $219,000.

2. Fiona Ma to speak at Reopen CA conference

State Treasurer Fiona Ma

I was surprised to see State Treasurer Fiona Ma, a Democrat and Newsom ally, listed as a speaker for a conference called Re-Open Cal Now, scheduled for this weekend in Sacramento. Many of the other speakers — including Republican Rep. Tom McClintock, Republican Assemblymembers Kevin Kiley and James Gallagher, and Riverside County Sheriff Chad Bianco — have been vocal opponents of Newsom’s coronavirus restrictions. But Ma told me in a Tuesday phone call that her scheduled appearance at the conference is “not about the politics, but … trying to help as many people as we can” access local, state, federal and private-sector relief. She added that she supports Newsom’s latest regional stay-at-home order.

  • Ma: “I definitely told the organizers that if this becomes a political event, like a Recall Gavin event, that I am not going to show up. … My intention is really to educate and spread the word about all the different resources that are available.”

Speaking of the recall effort, organizers announced Tuesday that they had collected more than 1 million signatures. (They need around 1.5 million valid signatures to prompt a recall election.) And one of the campaign’s biggest donors, who had until this point remained unknown, was revealed Tuesday as John Kruger of Orange County. A spokesman for Kruger’s company, Prov. 3:9, said Kruger opposes Newsom’s orders limiting indoor religious gatherings amid the pandemic.

3. Newsom considers Chau for judgeship

Assemblymember Ed Chau on the Assembly floor on Sept. 10, 2019. Photo by Anne Wernikoff for CalMatters

An exclusive scoop for you: Newsom is considering appointing Assemblymember Ed Chau, a Monterey Park Democrat, as a judge on the Los Angeles County Superior Court, according to documents I obtained. Chau, who was reelected to the state Assembly in November and wouldn’t hit term limits until 2024, told me Tuesday he is seeking the judgeship because “I’d like to plan ahead to continue in public service,” though “my commitment now is to the constituents I serve.”

If Newsom appoints Chau to the judgeship, it could spark a third special election this year for a seat in the state Legislature. Newsom has already declared a special election for the state Senate seat vacated by Holly Mitchell, and another special election will be called if Assemblymember Shirley Weber is confirmed as Secretary of State. Depending on who wins those special elections — and who Newsom chooses as California’s next attorney general — even more special elections could result.

It’s rare for a California governor to appoint a sitting legislator to the judicial bench. In the past 50 years, only six state legislators have resigned after being appointed as judges, according to Alex Vassar, communications director for the California State Library. The governor’s office did not respond to a request for comment.

4. State mismanaged tobacco tax revenue

Cigars with flavored wrappers at a liquor store in Berkeley. Photo by Anne Wernikoff for CalMatters

State agencies missed the opportunity to collect millions of dollars in tax revenue and mismanaged other funds from Prop. 56, a $2 tax on tobacco products approved by California voters in 2016, according to a scathing Tuesday report from the state auditor. One state agency incorrectly calculated the tax rate for certain tobacco products, costing the state $6.3 million that could have been funneled into health care programs. Other agencies didn’t use Prop. 56 funds as intended: The Department of Health Care Services received $220 million to repay the student loans of physicians and dentists who work in areas with provider shortages — but ended up awarding tens of millions of dollars to physicians who don’t work in those areas. Nevertheless, the department said it wouldn’t implement the auditor’s recommendation of requiring all loan recipients to work in areas with provider shortages.


CalMatters commentary

CalMatters columnist Dan Walters: California’s unemployment department has been a titanic disaster, and Newsom bears the onus of its failures.

Time for a strict lockdown: No more fake lockdowns with confusing guidelines. We need a four-week shelter-in-place that allows only truly essential human interaction, argue state Sen. Steve Glazer, an Orinda Democrat, and Yaneer Bar-Yam of the New England Complex Systems Institute.

Return $12.5 billion to schools: Newsom and the Legislature can correct bad policy and pledge not to balance this year’s budget on the backs of kids and teachers, writes Bill Lucia of EdVoice.

Committing to clean energy: Newsom should prioritize clean transportation and incentives for zero-emission vehicles in his 2021-22 budget proposal, argue Assemblymember Phil Ting, a San Francisco Democrat, and John Bossel of CALSTART.


Other things worth your time

Appeals court signals it may block some California church COVID restrictions. // Los Angeles Times

That new surcharge on most California bills? It’s to help utilities pay for future wildfire damage claims. // Patch

What’s at stake for California in the Georgia vote to determine Senate control. // San Francisco Chronicle

Hundreds of Google employees unionize in rare move for Silicon Valley. // New York Times

How big was San Francisco’s pandemic exodus? Look at U-Haul traffic. // San Francisco Chronicle

As some firefighters refuse COVID vaccine, LAFD offers prizes to encourage getting shots. // Los Angeles Times

Only 60% of LAPD officers, employees willing to take COVID vaccine. // Los Angeles Times

In freezer kaput, this NorCal hospital had two hours to give out 600 vaccine shots. // Los Angeles 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...