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The Nooner for Friday, May 22, 2020, presented by SYASL Partners
Happy Friday (whatever that means)! Lots more out there than what I've gotten to after getting bogged down in the unemployment update and I'm out of time.
Thank you for the feedback on the podcast released yesterday with Chris Micheli on the crazy legislative process during this pandemic time. In the scramble to both write and edit video, I missed that Chris had a column for Fox & Hounds yesterday quantifying the impact on the bills introduced of the abbreviated/shifted legislative year.
I just had to get out yesterday. I grabbed my mask and sanitizer and went for a needed walk. Fortunately, most of the walk was human-less, something I never thought I would revel in. But, that meant no mask.
For those that don't understand my caption, the west face (and north) of the Capitol has been covered with huge white plastic sheeting stretching from the ground, over the balcony, to above the columns for a re-tiling project on the balcony. The plastic was there for, what, nine months? It was accompanied by fencing and ruined the desired visuals of the anti-vaccination protests last fall, along with the busloads of tourists that stop by for what is a beautiful shot.
We're gone, and now so is the plastic. No matter how bad things get, I never tire of looking at the building and she provides particular serenity during these times, particularly amidst bookmarking an empty Capitol Mall with her counterpart -- the Tower Bridge -- at the other end.
Anyway, I made you the above "postcard."
ANNEX: On the other side of the Capitol, the face isn't as nearly as pretty, although it still is lipstick on the pig known as the Capitol Annex. As you likely know, we're in the middle of a multi-year project to construct a building that will temporarily house offices of the Legislature, governor, and lieutenant governor as well as committee rooms. The temporary building is being constructed on what was a parking lot on O street, one block from the Capitol on the other side of the Legislative Office Building.
After everything is moved out of the Annex constructed in 1952 -- which has significant fire safety, ADA, and other health and safety issues (uh, bathrooms) -- and into the new "Swing Space," the existing Annex attached to the historic Capitol building will be reconstructed. Upon completion of the reconstruction and return of the folks and functions housed there, the "Swing Space" will be used for other state government functions. For folks that think that means an expansion of government, it is not. The state currently leases lots of space in costly office towers around town and there is a long-term goal to reduce reliance on leased space. Here is the full project description, which is being overseen by the Joint Committee on Rules.
...and along come the historic preservationists.
In the Sacramento Business Journal, Ben van der Meer reports (paywalled) that there there is an effort by several activists, including former mayor Heather Fargo, to persuade the Joint Rules Committee to change the entire project to keep legislative offices permanently in the "Swing Space" and remodel the existing Annex.
Opponents of the project argue that changes could shave $77 million off the project's $750 million price tag at a time of COVID-19 budget cuts, writes van der Meer. In the Governor's May Revision, the project was moved from being paid for with cash but instead financed over time with lease-revenue bonds.
However, it is unlikely that changes are going to made at this point. Van der Meer reports:
Designating the swing space building for legislative uses permanently would have another consequence, he said. Currently, any legislator can get to a hearing room, meet with another legislator, ask staff for counsel or perform other functions within the same building, often in a short walk. Splitting them between two buildings a couple blocks apart would change that dynamic, he said.
"It would really impede the ability of a legislator to do that work," he said.
For anybody who has lobbied on Capitol Hill and run through tunnels between meetings and committees, you can understand the desire to keep most things under one roof.
Okay, on to the gnus after the jump...
COVID-19: As California counties rush to reopen, yesterday was another tough day in the state, with 104 deaths and 2,314 new cases, according to the Chron's tracker. Of these, 46 of the new deaths and 1,204 of the new confirmed cases were reported by LA County. In Orange County, there were 14 new reported deaths and 115 new cases, and hospitalizations continue to be on the rise.
The LAT's tracker reports "Over the past week, the state has averaged 1,932 new cases and 79 new deaths per day," meaning yesterday was again above the 7-day average and it can't all be blamed on LA and Orange counties.
REOPENING: The list of counties granted the okay to move to Stage 2B with further reopenings now is: Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kern, Kings, Lake, Lassen, Madera, Mariposa, Mendocino, Merced, Modoc, Mono, Napa, Nevada, Placer, Plumas, Sacramento, San Benito, San Diego, San Joaquin, San Luis Obispo, Santa Barbara, Shasta, Sierra, Siskiyou, Solano, Stanislaus, Sutter, Tehama, Trinity, Tuolumne, Sutter, Ventura, Yolo, and Yuba. [43 of 58 counties]
- Los Angeles County: In Los Angeles County, cities are starting to request that the state offer variances to advance reopening based on their localized situation rather than the county-by-county process. Today, the Beverly Hills City Council will consider sending a letter requesting such a variance, and I have heard that Santa Clarita to the far north of the county and places like Diamond Bar to the eastern side of the county may consider the same.
- San Berdoo County/Big Bear Lake: The mountain resort in San Bernardino County was not granted a special localized variance after a May 13 letter sent to Governor Newsom, but with lucrative weekends ahead, the city plans to go ahead anyway reports Leila Miller in the LAT.
“Businesses and residents should take responsibility for their own actions, should thoughtfully consider the governor’s orders and the risks associated with their specific circumstances [including health, legal, financial and licensing], and act accordingly,” officials said in a news release Thursday evening.
Apparently, on May 8, the county public health officer in San Berdoo rescinded most local orders but the county doesn't qualify for a variance from the state order. However, those businesses and individuals with state licenses (alcohol beverage, nail/hair salons) are still subject to state enforcement and can have their licenses suspended or revoked.
These are the county's stats from yesterday's update:
- Casinos: In the Bee, Joe Davidson and Dale Kasler report on the reopening of the Hard Rock Casino in Wheatland, about 40 miles north of the State Capitol, which was a crowded affair.
more after the jump...
UNEMPLOYMENT: We knew it was coming. It's bad. It's worse than bad. It sucks. It's miserable.
California's unemployment rate rose to 15.5% in April. Like the federal report a couple of weeks ago, the data measure only through April 12, before the Disney furloughs and many other furloughs and layoffs. It will be even worse next month, which will measure the conversions from paid leave to furloughs in late April and early May as well as the layoffs by Uber, Airbnb, and many others. There hasn't been much positive this month.
California lost a net 2,344,700 nonfarm payroll from the previous month's report, the largest on record.
All eleven sectors lost jobs March 13-April 12. Here they are sorted by month-over-month:
The fact that leisure and hospitality, which includes restaurants, hotels, theme parks, and the like tops the list is no surprise. The good news is that there are more furloughs there than most other sectors. The bad thing is that nobody can predict when the demand will return.
For example and as I have written before, Disneyland may decide to reopen July 1 (nothing had been announced). The demand is uncertain, but they likely would make discount offers to local residents, as they frequently do during slower seasons. Thus, park staff may be hired back before the hotels start filling up again along with the restaurants that cater largely to out-of-town guests.
"Other services" will scale up quickly. I need not say that there is pent up demand for haircuts, other personal care, and house cleaning. Trade, transportation, and utilities will likely take longer. I haven't heard any airline exec say that they expect demand to return to previous levels for at least the rest of this calendar year.
Let's look at county unemployment rates sorted by the month-over-month change:
What is absolutely stunning to me is that Los Angeles County moved from the 30th highest unemployment to 6th highest in one month, with an increase of 13.9%. Obviously, as the most populous county, the number of jobs is huge.
I need to spend more time with these data over the weekend, including evaluating the labor force number changes.
UNEMPLOYMENT INSURANCE: For Politico, Katy Murphy writes up the ire expressed at yesterday's Assembly Budget Sub 2 on the state's administration of the influx of unemployment insurance claims.
"We’ve never heard the type of suffering people are experiencing right now," said Assemblyman David Chiu (D-San Francisco). "The feedback we’re getting is atrocious."
Lawmakers told the agency's director, Sharon Hilliard, that their staff had been flooded with calls from constituents struggling to learn about the status of their claims or unable to reach EDD staff to have their questions answered. They cited a litany of problems, from delayed claims updates — provided by regular mail — to a lack of capacity to assist workers who speak languages besides English and Spanish, which Chiu said was a civil rights concern.
Constituents desperate for a lifeline will call the department, make their way through an automated menu and then get "hangups, for Pete's sake," said Assemblyman Tom Lackey (R-Palmdale).
"Even from some of the live calls we have hangups," he added, referring to residents being dropped mid-call. "That’s really unacceptable."
Hilliard did not refute the criticism, but explained that the agency — staffed earlier in the year for an unemployment rate of a mere 3.9 percent — had to rapidly escalate its operations.
"I don’t like it either," she said. "I totally agree with you. It’s not acceptable."
VOTE-BY-MAIL LAWSUIT: Yesterday, conservative legal eagle Judicial Watch filed a lawsuit on behalf of former congressman and CA50 congressional candidate Darrell Issa (R) and others challenging the authority of Governor Gavin Newsom's executive order to provide that the November election be conducted by mail statewide. The primary allegation is that Newsom's order as it pertains to federal elections offends Article I, Section 4 of the U.S. Constitution.
The times, places and manner of holding elections for Senators and Representatives, shall be prescribed in each state by the legislature thereof; but the Congress may at any time by law make or alter such regulations, except as to the places of choosing Senators.
The Congress shall assemble at least once in every year, and such meeting shall be on the first Monday in December, unless they shall by law appoint a different day.
And, here's the bill to make Judicial Watch and Darrell Issa moot, AB 860 (Berman et. al).
The case, filed in the Eastern District of California headquartered in Sacramento, has been assigned to Judge Morrison C. England, Jr. If the name sounds familiar, England had the SB 27 lawsuit on the Legislature's unsuccessful attempt to get President Trump's tax returns.
Everybody wins. Judicial Watch raises money either through attorneys fees or filing high-profile cases and sending out fundraising appeals to its list. California will vote by mail statewide in November, like Colorado, Hawaii, Oregon, Utah, and Washington already do. Issa is safe in November in CA50, although will have to show up occasionally with Campa-Najjar running again.
CA10 (Stanislaus): Following attention to a trove of controversial Facebook posts, the California Republican Party has withdrawn its endorsement of veterinarian Ted Howze (R) in the targeted race to retake the Central Valley seat now held by freshman Rep. Josh Harder (D).
cakeday and NEW classifieds after the jump...
CAKEDAY: Happy birthday to Jessica Duong, Abel Guillén, Assembly member Brian Maienschein, and Ed Manning!