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The Nooner for Tuesday, April 21, 2020, presented by SYASL Partners
Well, hello there, it's another early morning typing with two fingers on my very old iPad (second gen, I think, I dusted it off for Mexico City in February). but, she'll get me through it and I anticipate an exciting solution today that should have me back to normal by tomorrow. Well, as normal as anything can be right now.
Just a little bit ago, after I finished writing, my gift arrived! Sheri Sadler, president of Sadler Strategic Media, is a longtime Nooner reader on a colleague on the Open California/Capitol Weekly board. She emailed me yesterday to tell me that she had an unboxed MacBook in her closet. I told her to let me know how much, and she said that it was a gift, people have extended a hand to her in the past, and she was "paying it forward." Wow, that's more that having a cup of coffee paid for by the person ahead of me in line.
Anyway, she FedEx'd it and it arrived at 10am. It's identical to the one I had been using, but the bottom quarter of the screen isn't flickering and the keys aren't popping off when I type. I was even able to spellcheck this morning and, let me just say, I don't even want to look at the last couple of days.
Thank you Sheri, and thank you Nooner community for your patience over the last week!
Let'a get to it!
2020-04-21 GRIDLOCK: If you lock down a grid and nobody is on it, is it a successful operation? Downtown Sacramento has been a ghost town, with state workers teleworking (they have agreements to check-in at various times and show work product) and with lobbyists having nothing to do.
If you turned on the teevee news yesterday, you saw the throngs engaging in civil disobedience by trying to infect each other. This was part of a series events taking place across the country and was made up of several different agendas. One group organized and yelling "Present sir!" were our legislative-disrupting friends against vaccinations.
It was loud and I could hear the honking from Nooner Global HQ like the Canadian Geese during migration season. I don't know if we will see them this year with President Trump's immigration order yesterday. I digress.
During #NewsomAtNoon yesterday, the guv was asked why the protestors were given a permit by the CHP that led to a protest violating the state's stay-at-home order. Newsom responded that he was told that the permit specified that participants stated in the request that they would stay in their cars. Sam Stanton and Hannah Wiley report for the Bee that, upon a request to the CHP of why the permit was issued, there was finger-pointing all around.
They also report that the permit was issued for the West Steps, which have been fenced off for months for construction, but of course they were on multiple corners around the Capitol. While some local agencies have issued citations for violations of county public orders such as hanging out on closed beaches, I'm guessing that the CHP officers charged with public safety for the blocks around the Capitol (formerly a separate State Police) don't know the Sacramento county ordinance citation or that under state law.
Anyway, it was an annoyance for people with cabin fever watching people violating the state and county health orders while expressing agendas unrelated to the stay-at-home and physical decrees from vaccines to the President's reelection.
I get that.
But nobody got hurt -- except perhaps the protesters themselves.
TRAVEL LOSSES: The U.S. Travel Association has released a report of findings by Oxford Economics of losses of 519 billion for the rest of 2020, a decline of 45%. Yesterday, United Airlines reported a $2.1 billion loss for Q1 and obviously Q2 could be worse. The loss in Q1 was largely driven from reduction in international traffic, while Q2 will include reductions in both international and domestic.
While states may slowly reopen, all business conferences have already been canceled and other folks are unlikely to be running to airports soon. United has cut capacity by 90% in Q2 and is selling and making lease-back arrangements for aircraft. It has consistently been the largest carrier at San Francisco International and the renovation of its Terminal 3 has been indefinitely postponed.
I need not tell you that California is a leading destination for business and leisure travel. However, while that surges state and local revenues in good times, those revenues decline in bad times. And, from a travel perspective, these are not "bad" times. They are calamitous. I have a friend who works for a high-end, well-known hotel in San Francisco as a sales manager for large conferences.
While that sounds like she calls people to get them to book at the hotel, the title is misleading. The clients come to them and the manager just works through details from booking to execution. I met her when she was the manager for our annual legislative conference at the Hyatt here (before the Sheraton was built for labor folks).
So, she has been in the business for over thirty years. She has been furloughed for 90 days. From what I am told by several sources, essentially all conventions/conferences have been canceled for 2020. Some folks believe that the lucrative tech conventions will never come back after moving them online this year. It's not the attendees that don't want to party in SF and San Jose anymore -- it's those focused on the bottom line.
San Francisco's transient occupancy tax is 14% and San Jose's is 10%. Every room, every night. For those of you have looked at rooms in SF and thought the rates were well-above normal, it is likely there was a big convention in town like Salesforce. The state gets sales tax of 7.25%. You can quickly tally the losses in state and local tax revenue. It is not hyperbole to suggest that, if there is even just a 2-3 year "new normal" of big conventions not taking place, some big name hotels may not survive.
Leisure and hospitality accounted for around 2 million jobs in the state in March, according to the EDD. That was down 67,200 from February. We don't even want to see the April numbers. March didn't include the Disneyland Resort, as most folks were still being paid. I believe the survey is in the second week of the month, so we may not see those losses until the May numbers. Now, Disneyland isn't going anywhere, but many employees will be brought back slowly, as attendance from distance travelers (particularly international) will take awhile. Disneyland parks attendance may be fine as locals take advantage of specials, but they buy fewer souvenirs and don't stay in hotels.
I wrote on March 14 that the hotel tax in Anaheim accounts for 40% of all city tax revenues (not all revenues), but the hit to the city is going to be large and sustained for some time. The city's TOT is 15%, higher than San Francisco. It is about $170 million (10%) of the city's current year budget.
losses are all around. For the state, it is personal income, sales, and corporation taxes. For locals it is sales, likely ad valorem property taxes, and for many, the often overlooked transient occupancy tax. For some, cities have been happy to ask voters for an almost sure passage and they have become a growing part of city budgets. Why almost-certain approval? Voters don't pay them, visitors do.
For locals here, that's what is paying for the large convention center expansion community center remodel we've watched for months. Meanwhile, the the Hyatt Regency and. the Kimpton Sawyer are closed and I'm guessing The Citizen and Sheraton Grand are mostly empty.
more after the jump...
COVIS SPENDING OVERSIGHT: Over the last couple of weeks, there have been oversight hearings -- one in each house -- looking at the spending by Governor Newsom on COVID response. To be honest, while I am a huge budget geek, I have not watched either yet for a couple of reasons. With my laptop in quarantine from human contact, my screens are limited, particularly with the demise of CalChannel. Also, I can't miss #NewsomAtNoon or #TheDailyIshShow between POTUS and reporters originating in the (202).
Anyway, I'll watch them in the next couple of days when my laptop challenge is resolved. I do know that one of the persistent issues between legislators and the press was raised again yesterday -- these folks want disclosure of the governor's $990 million contract with a Chinese company for hundreds of millions of face masks, and other contracts totaling around $500 million for additional protective equipment. Others issues were exactly where equipment and supplies were being distributed.
Here are a few articles on the discussions (I would normally list the headlines, but there is no "Paste Special" on iPad. The things we are learning in this alternative universe.
STATE EMPLOYEE PARKING: An issue that has been brought to my attention is that many state employees required to work from home now and likely be strongly encouraged to after some restrictions are lifted are growing in frustration that they are shelling out $150-200/month for parking that they are not using.
Now, the fact that most state employees, including those of the Legislature, have to pay for their parking may come as a surprise to you. Obviously, the state by policy and practice wants to encourage use of alternative by public transit, carpool, bicycle, etc. As you may know, I'm a happy walker and a biker, but I am fortunate to live a mile from the Capitol and my domain is mostly on the downtown grid. But I also know that some people need to drive. There are young parents that live twenty miles out toward the foothills or in the opposite direction in Yolo or Solano County.
These aggrieved state employees also can't just forfeit their spot because there are waiting lists for many public and private lots so it could be a long wait to return to an available space.
Of course, it is fair to point that, as of yet, state employees have not had any compensation reductions, they were paying for it before, so why are they complaining? The employees would answer that they fear major budget cuts over the next eighteen months that could lead to mandatory furloughs. They point to Los Angeles mayor Eric Garcetti's announcement this week that city employees would have a 26-day furlough, or a 10% pay reduction. State employees looking at that argue that now is the time to save for that possibility.
I don't know the solution, but thought I'd let them know that somebody is listening. Sorry, you can't use my garage -- I have too many books in there.
VOTE-BY-MAIL: For PPIC, researcher Eric McGhee asks, if California uses all-mail ballots statewide in November because of COVID-19, whether it would benefit one political party as some assume. He answers no.
cakeday and classifieds after the jump...
CAKEDAY: Happy birthday to Brian Green, Justin Knighten, and Bob Schelen!