Good morning, California. It’s Tuesday, February 2.

Divided using equity formula

California’s flagging vaccine rollout may have just gotten a shot in the arm.

On Monday, the state Department of Finance formally notified lawmakers that California had received an unanticipated $1.7 billion in federal funds to help with its coronavirus response and vaccination efforts, according to a letter I obtained. Approximately $1.2 billion will go to local governments, and the Department of Finance — part of Gov. Gavin Newsom’s administration — is seeking legislative approval to send the money out as soon as possible.

The funds were divided with “an eye on equity,” Finance spokesman H.D. Palmer told me. Each local health jurisdiction — excluding Los Angeles County and the cities of Pasadena and Long Beach, which received money separately — got a base grant of $1 million. The remaining funds were divided based on a jurisdiction’s proportion of the 2019 population (50%), poverty rate (25%) and Black, Latino or Native Hawaiian/Pacific Islander population (25%). San Diego County came out on top with around $124 million, while Alpine ranked last with about $1.04 million.

This formula could potentially rankle small counties. Last month, the state auditor found that the Newsom administration had allocated smaller counties “significantly less” coronavirus relief funds per person than larger counties.

Also Monday, the state released signed letters of intent from Blue Shield and Kaiser Permanente, the two health insurance giants charged with running California’s new vaccine distribution system. The letters do not reveal the total cost of the contracts, but emphasize both companies will “not profit from this agreement” and will perform the work “at or near” cost. Blue Shield will manage providers across the state, while Kaiser will run at least two mass vaccination sites intended to serve hard-to-reach and disproportionately affected communities, according to the letters.

After the chaos of California’s initial vaccine plan, Newsom’s political future may well hinge on whether this new strategy pays off, CalMatters’ Ben Christopher reports.

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The coronavirus bottom line: As of Monday, California had 3,258,706 confirmed cases (+0.5% from previous day) and 40,908 deaths (+0.5% 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. Faulconer announces gubernatorial bid

Kevin Faulconer is officially running for governor of California. Photo by Gage Skidmore via Wikimedia Commons

Former San Diego Mayor Kevin Faulconer revealed Monday he is running for governor, whether in a recall election against Newsom — if it qualifies for the ballot — or in the next regularly scheduled election in 2022. The Republican is expected to formally announce his candidacy today, Groundhog Day — as indicated by a campaign video riffing on the iconic movie in which the same day repeats over and over again. “Doesn’t it feel like every day is Groundhog Day in Gavin Newsom’s California?” Faulconer wrote on Twitter. “This Groundhog Day, change is coming.”

Faulconer’s announcement comes a few days after John Cox, the Republican businessman who lost to Newsom in the 2018 gubernatorial election, said he’ll challenge Newsom again if the recall qualifies for the ballot. Also likely to throw his hat in the ring is Chamath Palihapitiya, a billionaire venture capitalist who supports the Newsom recall. The recall campaign announced Sunday it had collected more than 1.3 million of the nearly 1.5 million signatures needed to launch an election, though only around 410,000 had been deemed valid as of Jan. 6.

2. State blasted for prison outbreak

Demonstrators march to San Quentin State Prison on Aug. 2, 2020. Photo by Jose Carlos Fajardo, Bay Area News Group

A dispatch from CalMatters justice reporter Byrhonda Lyons: California prison leaders caused a “public health disaster” at San Quentin State Prison last year when they transferred inmates from the California Institution for Men in Chino who hadn’t recently been tested for coronavirus, according to a scathing report Monday from the Office of the Inspector General. Of the 189 transferred prisoners, 172 hadn’t been tested for coronavirus for at least two weeks before they were moved, the report found — leading to an outbreak that ultimately sickened more than 2,000 San Quentin inmates and killed at least 28. The report also found that the California Institution for Men transferred the inmates under pressure from California Correctional Health Care Services executives. When a nurse asked if prisoners should be retested before the transfer, an executive responded, “No reswabing (sic).”

  • A prison employee: “CCHS said MOVE THEM NOW and we are trying to comply.”

On Sunday, a caravan of around 100 cars drove through San Francisco to protest the state prison system’s handling of coronavirus outbreaks.

3. New business applications skyrocket

Dan Zhao, left, and father Keguang Zhao at Cozy Wok, a Chinese restaurant they opened amid the pandemic, in Oakland on Jan. 28, 2021. Photo by Anda Chu, Bay Area News Group

Applications for new business licenses rose nearly 22% in California in 2020, according to a U.S. Census Bureau analysis — a reminder of Californians’ resiliency and innovation even as pandemic closures drive thousands of small businesses to shut down permanently and unemployment to tick up. The economic devastation has hit small businesses owned by people of color and women particularly hard, but some Californians are finding new opportunity amid the wreckage, CalMatters’ Laurence du Sault reports. After Hilda Medina lost her $300-a-week job as a babysitter at a Contra Costa daycare, she began selling sugar- and gluten-free breads online — and is now making up to $1,200 weekly.

  • Medina: “If there hadn’t been this pandemic I would never have dreamed I’d be able to do this. To make more money, and with my own business?”

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CalMatters commentary

CalMatters columnist Dan Walters: While California’s politicians wrangle, millions of kids are stuck at home and their educations are suffering.

Rich should pay their fair share: Our tax code gives large corporations and wealthy Californians like myself special treatment at the expense of everyone else, argues Karen Edwards, a former Yahoo executive and member of the Patriotic Millionaires.

Harnessing the power of music: Newsom’s proposal for a California Creative Corps will help us grieve, heal and come together, write Makiko Hirata, an international pianist, and Jeff Le of the Truman National Security Project.


Other things worth your time

Los Angeles schools to remain in hard shutdown for near future. // Los Angeles Times

California schools press ‘play’ on esports leagues during pandemic. // EdSource

Why must TVs remain off at restaurants? Yelling, screaming can spread coronavirus, officials say. // Los Angeles Times

How a California university is trying to shield an entire city from coronavirus. // New York Times

Against supervisors’ wishes, San Diego County sent rent relief money to ineligible cities. // inewsource

Biden order poised to expand Bay Area homeless programs. // Mercury News

Sacramento homeless group demands city manager be fired over storm response. // Sacramento Bee

Grading every city and county in California on meeting state-mandated housing goals. // Los Angeles Daily News

Some PG&E fire victims in a race against time to get paid. // San Francisco Chronicle

After a few snowy days in Northern and Southern California, there’s more to come this week. // 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...