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The Nooner for Thursday, June 11, 2020, presented by SYASL Partners
Good day sunshine! Thank you all who have responded to my plea to help close the $2,700 advertising gap this month (exacerbated by $3,000 in accounts) during the stay-at-home order through subscriptions and donations. We're getting very close and it's pushing me to work even harder for you rather than fret over paying my bills this month.
For those who have donated, I'll be reaching out to you to find out if you'd be okay with your name being listed in an upcoming thank you in this space.
In yesterday's Nooner intro, I talked about my walk around downtown on Tuesday. I meant to mention that Goodie Tuchews, the popular cookie shop across from the Capitol on L Street is back open. However, business is very slow.
Even while reopening, this is going to be a brutal time for Capitol-area businesses and we will lose many. A majority of state employees are teleworking with an ongoing goal of 75% working remotely.
Additionally, for those like Goodie Tuchews, Chicory (not open), Lit Delhi (window service), and Starbucks, the downsizing of the Capitol presents a huge challenge. Currently, I'm told that legislative offices are allowed two staffers on site and committees are allowed one. Even those present, including members, are not going to-and-from the Capitol because of the additional security because of the protests. Because of the temporary perimeter gates, it's not currently as easy to walk out the north doors and cross L Street. Those in the Capitol are basically staying in the Capitol.
Some believe that the current limitations of individuals physically present in the Capitol will last at least the rest of the calendar year. That will be brutal for these businesses, particularly the meeting spots where lobbyists frequently meet with lawmakers and their staff.
On a similar note, Starbucks yesterday filed with the SEC an update that includes closing up to 400 locations worldwide as they pivot many locations to carryout and pick-up only. In the filing, the Seattle-based company forecasted a loss of $3.2 billion in the second quarter. CNN reports:
"This repositioning will include the closure of up to 400 company-operated stores over the next 18 months in conjunction with the opening, over time, of a greater number of new, repositioned stores in different locations and with innovative store formats," the company wrote in its filing.
Starbucks said its retail strategy is designed to "enhance the customer experience, expand our retail presence and enable profitable growth for the future."
"We were already thinking about what does that future state look like in those metro areas?" a Starbucks spokesperson said. "Covid-19 has actually allowed us to accelerate the plans we already had on the books."
Starbucks said its new pickup stores will better serve "on-the-go" customers while limiting crowd sizes in its cafes.
I remember when I first wrote about COVID-19 on February 2. Some criticized me and said it was hyperbole and a Chinese issue. This was before the "12 cases going to zero" comment by President Trump. I wish I had been wrong, but I wasn't. Then we had the "60,000 deaths." Then "80,000-100,000." We're now at 112,924 U.S. deaths according to Johns Hopkins. The influential IHME model that had provided that 80,000-100,000 range now forecasts 169,890 by October 1, with a range of 133,201-290,222. The California model forecasts 8,821 deaths by October 1 with a range of 7,151 to 12,254. California currently has 4,853 deaths according to the Chron's tracker.
Daily deaths are expected to decrease through June and July, then remain relatively stable through August before rising sharply in September, the model forecasts.
"If the US is unable to check the growth in September, we could be facing worsening trends in October, November and the following months if the pandemic, as we expect, follows pneumonia seasonality," said Dr. Christopher Murray, director of the Institute for Health Metrics and Evaluation at the University of Washington School of Medicine.
Many states have loosened restrictions that began in March to stop the spread of the virus. But with no vaccine, more people congregating in public places and recent protests for racial justice in major cities, one health expert predicted that the nation's coronavirus death toll will nearly double by September.
"We're going to get another 100,000 deaths by September. So, that's a catastrophic cost," Jha said. "We really do have to try to figure out how to bring the caseloads down from these scary levels."
Tomorrow, the four Sacramento-area counties are reopening a panoply of businesses including gyms, bars, and movie theaters. Hospitalizations are up, but political pressure from the business community has leaders ahead of health experts. As someone on the teevee said yesterday, these are the reopenings that "make Dr. Fauci cringe."
In Orange County, the public health director was pushed out by some Board of Supervisors members (including a former Assembly member) angry at her order for residents to wear masks in some public settings. I'm told by somebody who watches the OC BOS meetings that during public comment, one member of the public repeatedly referred to the BOS chair as "Chairman Mao." The BOS chair is CA48 Republican candidate Michelle Park Steel, who was born in South Korea and whose husband Shawn Steel is the former chair of the California Republican Party.
Folks I talk to from around the Capitol are perplexed at the reopenings and why Newsom is letting counties move ahead faster than the metrics suggest they should be. As I wrote yesterday, polling shows that the vast majority of his voters (Dems and left-leaning indies) support keeping the restrictions in place mid-May or even making them more strict. The people who are perplexed span the political spectrum from liberal to conservative to libertarian. It's surprising how many political animals are unhappy that leaders seem to be putting politics before health.
CNN reports on the "quarantine fatigue."
The coronavirus is spiking in more than a dozen states and intensive care beds are filling again, but several governors have no plans to reimpose shutdown measures or pause reopenings, a sign that the political will to take drastic measures has dissipated even as the virus is still raging.
Back to my point, we're in this for the rest of the year, perhaps with a midsummer night's dream of fewer cases and deaths. However, experts at both IHME and Harvard agree on a spike starting in September that could be brutal through October and November. Things will not return to normal around the Capitol soon and many businesses will have to change their operating models if they are going to survive. Many unfortunately will not and I particularly fear my favorite spot Darna, which I have patronized in particular for its buffet when I try to watch my Speedo-fitting figure. Buffets are no go for at least this year if not several.
For now, order some cookies from Goodie Tuchews. Order some spices and tea from The Allspicery (both have delivery options and Allspicery ships as well). Pick them up in one quick stop. Keep our Capitol-area small businesses alive.
...lots more after the jump.
UNEMPLOYMENT CLAIMS: This morning's unemployment claims report shows applications increasing in California from 228,634 for the week ending May 30 to 258,060 for the week ending June 6 (advance), with an increase in those receiving benefits from 2,752,401 to 2,854,773 (advance). Nationally, both initial claims and insured payments dropped.
STATE BUDGET: Well, we now know the plan. It's a plan to negotiate with Governor Newsom after Monday's deadline but to make sure lawmakers keep getting paid. Yesterday in a joint statement, Senate President Pro Tem Toni Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) announced that they would pass the "Legislature's" joint budget plan on Monday's constitutional deadline before while continuing to negotiate with Governor Newsom to close the difference between the May Revision and legislative Democrats plan. Passing the budget bill on Monday only requires a simple majority and with the over two-thirds advantage held by Democrats in both houses, members in tougher districts can be given a pass on the maneuver.
The Legislature's budget plan was amended into SB 808 yesterday was available at 9:23pm last night so it can be voted on at any time Monday.
After Monday, a whole new budget bill could be passed by the Legislature or a "baby budget bill" could be approved to address a compromise between legislative leaders and Governor Newsom. Because they are so dramatically different based on the federal funds trigger mechanism approach, passing a whole new bill would be easier unless Newsom comes along with the Legislature's wait-and-cut-later approach and only minor tweaks are needed.
The date that now matters is July 31. After that date, legislative employees are not paid and payments to schools, other local governments, and vendors are not made. Non-legislative employees are paid without a budget.
Here is the Legislative Analyst Office's handout on the Legislature's plan and how it differs from the May Revision on major points. There are lots of other issues in play, most notably the frustration over the governor's expenditure of funds while the Legislature stayed at home amidst the COVID-19 public health order. This resurfaced yesterday during the debate on ACA 25 (Mullin et al.), the measure to place the question on the November ballot of whether the Legislature should be allowed to conduct remote proceedings under specific states of emergency. That measure, which is co-authored by Assembly Republican Leader Marie Waldron (R-Escondido), passed 60-13-6, sending it to the State Senate.
ACA 5 (Weber): After a lengthy debate (video not available yet), the proposed constitutional amendment for the November ballot to repeal Proposition 209 (1996) prohibiting affirmative action in state education, hiring, and contracts passed the Assembly on a 60-14-5 vote. Joining with Democrats in passing the measure were Tom Lackey (R) and Chad Mayes (NPP).
RECALL REDUX: Yesterday, the Secretary of State certified petitions for another recall effort of Gavin Newsom filed by Orrin Heatlie of Folsom. He and his masses tried over the winter, but failed in February. Who is this guy? Well, Orrin took the earliest possible CalPERS retirement last year under the 3% @ 50 formual as a Yolo County Sheriff's deputy. According to the Mountain Democrat, the Folsom resident spent 25 years in law enforcement. Assuming that was all with California public safety departments, that means that CalPERS is paying him $114,672 (based on final comp of 152,896) to spend his time on fruitless efforts to recall Newsom.
In 2020-21, the City of Sacramento will be paying a 20.42% employer-side contribution for public safety employees. The 3% at 50 formula was added in 2000 as part of many pension sweeteners when the state's pension funds had actuarial surpluses. Now, not so much.
On that note, don't look at the Dow Jones g
Sports betting, Dismaland, cakeday, and classifieds after the jump...
SPORTS BETTING: Here is the lawsuit filed by the coalition of gaming tribes seeking to have the deadline extended for their initiative to allow sports betting, craps, and roulette and tribal casinos and sports betting and horse racing tracks. Even if given an extended deadline, it's too late to get it on the 2020 ballot and the signatures wouldn't be tallied by 131 days prior to the November 3 election, which is a constitutional deadline (Article II, Section 8(c)). We are currently 145 days out from the November 3 election.
What the lawsuit seeks is an extension so that signatures gathered before the stay-at-home order are not invalidated as they continue to pursue gathering sufficient signatures for the 2022 election.
If the court grants the coalition's request for an extended deadline, it could also give a hand up to help the initiative to reduce single-use plastics and increase recycling also qualify for 2022. It has a circulation deadline of July 6 and reportedly has close to enough signatures but backers would certainly like the extra time to increase the total number of signatures to ensure that they have the valid 623,212 required.
DISMALAND: Oh, Disney fans, relax. I have lots of great Disneyland memories, and somewhere around here is a picture of me in a stroller with Donald Duck sitting on my lap. I actually know what an "E-ticket" is and we were always left with the least desirable tickets in our passbooks. By the teenage years, however, the cool OC kids went to Knott's Berry Farm for the more thrilling rides and concerts included with admission. I Bust(ed) a Move with Young MC and was Like a Surgeon with Weird Al. Of course, it was also because there were fewer tourists and at night it was a time for OC teens to flirt with and meet each other.
Anyway, Disneyland is celebrating its 65th birthday on July 17th and it has announced that date for reopening along with Disney California Adventure. For the Register, Marla Jo Fisher reports:
The opening will occur in phases, with the Downtown Disney District opening first on July 9. Disney’s Grand Californian Hotel & Spa, Disney Vacation Club and Disney’s Paradise Pier Hotel plan to reopen on July 23, pending regulatory approval. Disneyland and Disney California Adventure parks expect to reopen July 17.
To control crowds, there will be a new theme park reservation system for all guests, including annual passholders. All must obtain an advance reservation to get into the parks. Temporarily, park tickets and annual passes are not for sale.
Parades and nighttime spectaculars are temporarily suspended, but new character meet-and-greets will be available
No one except a skeleton staff has been allowed inside the park since it closed March 14 — the first time in its history there was an extended closure. Disneyland and Disneyland California Adventure were last open to the public on March 13, with an original plan to stay closed through the end of March. But as COVID-19 spread across Southern California and the U.S., the closures were extended.
This impacted not only Disney but the surrounding resort area and all of Orange County since the Disneyland Resort is the county’s largest employer and biggest tourist draw. Some 150 hotels now surround Disneyland.
“This means the third-party operators – the hotels, park vendors, people supplying products and services to the parks – can finally get back to work again,” [Micechat fan blog operator Todd] Regan said.
It is good news for Anaheim in particular, as the city has been clobbered by the loss of hotel tax revenues. As I've written previously, 40% of the city's tax revenue in the current year was expected to come from that tax. Without Disneyland, baseball, and conventions and conferences at its spacious convention center, hotels have remained empty for nearly three months. However, don't think that the hotels will fill up soon as most conventions and conferences will not be held this year and international travelers won't be coming to Disneyland.
On a final note, the OCR's Marla Jo Fisher used to have the education beat so I talked to her all the time when I was the budget lobbyist for the Community College League. Covering amusement parks sounds a lot more fun than covering education in this environment!
CAKEDAY: Happy birthday to Jim Anderson, Jonathan Colmenares, Paul Fickas, and Nicole Winger!