April 24, 2020 Edition

Assembly Convenes Budget Oversight Hearing on COVID-19 Response

On Monday, the Assembly Budget Subcommittee No. 6 on Budget Process, Oversight, and Program Evaluation convened an oversight hearing regarding the Newsom Administration’s ongoing COVID-19 response activities. Monday’s hearing had approximately 11 Assembly Members in attendance with members physically distanced and panelists participating via videoconferencing. Budget Subcommittee No. 6 Chair Assembly Member Phil Ting opened the hearing with a brief overview of the Legislature’s actions in providing the Newsom Administration with up to $1 billion in emergency funds to respond to the COVID-19 emergency, as well as the Legislature’s role in exercising oversight over the expenditure of the funds and the deployment of resources and supplies.  

The oversight hearing featured with a presentation by California Health and Human Services (CHHS) Agency Deputy Secretary Marko Mijic on California’s COVID-19 infection, hospitalization, and mortality modeling and projections. Mijic detailed California’s response to the COVID-19 pandemic, effectiveness of the state’s non-pharmaceutical interventions, and health care system surge capacity. An overview of total incurred and anticipated COVID-19 disaster and public health response state expenditures and federal reimbursements was provided by representatives from the Department of Finance (DOF), the Office of Emergency Services (OES), and the Legislative Analyst’s Office (LAO). OES additionally provided a handout to the subcommittee detailing distribution of personal protective equipment by county and a resource request process flowchart.

Questions from subcommittee members spanned a wide array of topics, including statewide testing capacities, supply procurement and distribution to health facilities and public health departments, social safety net programs, COVID-19 expenditure tracking, homelessness services, hospital and telehealth services, health and behavioral health, economic impacts, and unemployment benefits, among others.

Notably, Assembly Member Joaquin Arambula posed a number of questions related to the Administration’s actions and impacts of the ongoing COVID-19 pandemic, including the procurement of personal protective equipment (PPE), skilled nursing facilities, access to health services, food bank shortages, and economic assistance to undocumented residents. Assembly Member Richard Bloom also briefly discussed the importance of contact tracing and investigations in adequately responding to the pandemic and safely reopening and resuming normal operations in the state, as well as dedicated funding and resources for pandemic preparedness and response.

Assembly Member Jim Wood, who is not a member of the subcommittee but was invited to attend the hearing, commended the Newsom Administration for establishing the California Health Corps to increase health care surge capacity staffing. Wood also expressed a series of concerns related to federal funding availability to small jurisdictions, as well as the Newsom Administration’s communication and information sharing with the Legislature, framing the matter as a “missed opportunity” to better coordinate state and local resources and response activities.

Subcommittee Chair Phil Ting, in his questioning and closing remarks, reiterated the urgent need for transparency from the Newsom Administration. In requesting additional information on incurred and anticipated COVID-19-related expenditures, Ting noted, “The emergency powers that were granted were with an understanding that this would be for a certain amount of discreet time. It wasn’t the sense that there was a blank check or we would just be notified after expenditures were already committed to.” Ting further discussed the Legislature’s work in building the state’s budgetary reserves and expressed the desire on behalf of the Legislature to have a greater “say with how this reserve money is being spent.”

Assembly Budget Subcommittee No. 6 will convene another hearing next Monday, April 27 to assess economic stimulus efforts and response actions as a result of the COVID-19 pandemic. A recording of Monday’s hearing is available here. The agenda and background materials are available here.

Newsom Announces Initiatives to Support Older Adults During COVID-19

Today, Governor Gavin Newsom announced a series of initiatives to support vulnerable older adults in California who are isolating at home during the statewide stay-at-home order. The initiatives announced today focus on providing older Californians with nutritious meals, social connection and support, and wellness checks. The initiatives include:

Restaurants Deliver: Home Meals for Seniors

California will be implementing a first-in-the-nation program to ensure vulnerable older adults have consistent access to nutritious meals while staying at home. The program will enlist community restaurants to prepare meals that will be delivered to older Californians who are isolating at home and support local restaurant workers and owners who have lost business during the pandemic. The program is slated to be administered by local jurisdictions and will serve older Californians who are ineligible for other nutrition programs. Participating jurisdictions will be published on www.covid19.ca.gov. More information on the program is available here.

Social Bridging Project

The Social Bridging Project aims to mobilize more than 1,000 callers to proactively reach out to older Californians who are isolating at home. The project will address social isolation through direct, one-on-one communication with older Californians, many living alone and isolated. Listos California has partnered with the California Department of Aging, United Airlines, Community Emergency Response Teams (CERT), and Sacramento State University to make the calls. The callers will check on the individuals’ well-being, connect them to resources, and connect with them on a personal level.

Friendship Line

The Newsom Administration is expanding the Friendship Line California to support lonely and isolated older Californians across the state. The Friendship Line is toll-free and available to provide emotional support to older adults facing loneliness, isolation, and anxiety. The California Department of Aging is partnering with the Institute on Aging to support this initiative.

More information on the these older adult-geared initiatives is available here.

Newsom Issues Executive Orders on Medi-Cal Flexibilities, Social Services Programs, Financial Assistance Garnishment, Others

This week, Governor Gavin Newsom issued two executive orders amid the ongoing COVID-19 pandemic. These orders include:

Foster Youth Services

Newsom late last week issued Executive Order N-53-20 allowing for temporary waivers of certain youth programs to ensure the continuity of care in response to the COVID-19 pandemic. The executive order provides county welfare agencies and probation departments the ability to perform necessary functions using alternative processes other than face-to-face interactions. This action includes allowance for a 60-day waiver to allow for flexibility in the emergency placement of foster youth and ensures that foster youth have access to critical programs and technology by verifying foster care status for foster youth and wards of the juvenile court whose cases are pending.

Miscellaneous Flexibilities on DMV, CEQA, and CalRecycle

Governor Newsom on Wednesday issued Executive Order N-54-20 providing various flexibilities in response to the COVID-19 pandemic. The order provides a 60-day extension for customers on several Department of Motor Vehicles (DMV) deadlines, allows posting, filing, and notice requirements under the California Environmental Quality Act (CEQA) to be satisfied through electronic means, and temporarily allows retailers to provide bags to consumers without charge and to pause redemption of beverage containers in stores to mitigate the spread of COVID-19.

DHCS and Medi-Cal Provider Flexibilities

Executive Order N-55-20 was issued by Governor Newsom on Wednesday providing flexibility to the Department of Health Care Services (DHCS) and Medi-Cal providers on a variety of deadlines and requirements to ensure continuity of service to patients and customers is not impacted by the effects of the COVID-19 pandemic. The order will allow fair hearings to continue for California Children’s Services (CCS) on grievances and appeals to take place by phone or video conference. The order will also ensure flexibility for DHCS and CDSS to continue providing mental health care services and programs, as well as temporarily suspend requirements for in-person signatures for people to obtain certain prescription drugs covered by Medi-Cal.

Local Educational Agencies Plans

Governor Newsom issued on Thursday Executive Order N-56-20 extending deadlines for local educational agencies (LEAs) to submit Local Control and Accountability Plans (LCAP), which are multiyear planning documents tied to budget projections. By law, LCAPs must be developed in collaboration with parents, students, teachers, and community groups.

LEAs will publish a written report to their communities explaining how they are responding to COVID-19. They will be required to explain steps they have taken to deliver high-quality distance learning opportunities, provide school meals in non-congregate settings, and arrange for supervision of students during ordinary school hours. LEAs will also be required to explain the steps they have taken to meet the needs of low-income students, English learners, and foster youth. The executive order also waives required physical education minutes and annual physical fitness testing that requires on-site instruction.

COVID-19 Financial Assistance Garnishment

Executive Order N-57-20 was issued by Governor Newsom on Thursday exempting garnishment for any individuals receiving federal, state, or local government financial assistance in response to the COVID-19 pandemic. This includes recovery rebates under the federal CARES Act and does not provide exemptions for child support, family support, spousal support, or criminal restitution for victims.

President Signs Fourth Federal COVID-19 Aid Package

This afternoon, in a ceremony in the Oval Office, President Trump signed the fourth coronavirus relief bill passed by Congress earlier this week. The legislation contained $484 billion of additional funding including funding for the small business Paycheck Protection Program (PPP), an additional $75 billion in funding for hospitals, and $25 billion in targeted COVID-19 testing appropriations.

Meanwhile, Speaker Nancy Pelosi has indicated the House of Representatives are already at work on a fifth legislative package dubbed by Democrats as “CARES 2.” Issues that Democrats would like addressed include funding for States and local governments hit hard by the pandemic slowdown, monthly cash assistance for lower income individuals and families, renter protections, funding to support expanded vote-by-mail initiatives in the states, and expanded health coverage for patients infected by the coronavirus. Republicans in the House and the Senate are reluctant to rush into further COVID-19 spending proposals and instead many are recommending states begin to lift their lockdowns. 

CHEAC prepared a memo detailing the contents of the federal package available here. A statement from Governor Gavin Newsom on the passage of the measure is available here.

LAO Issues Report on State Budget Effects of Recent COVID-19 Federal Actions

This week, the Legislative Analyst’s Office (LAO) published a post detailing impacts on California’s state budget in light of COVID-19 and new federal resources that may assist in addressing state budget issues as a result of responding to the pandemic. The LAO examines sources of a potential budget problem where the state’s anticipated General Fund revenues are less than the General Fund costs to maintain state services. The state will likely be facing a budget problem upon the Governor’s release of his May Revision, as a result of three major COVID-19-related sources:

  • Higher Direct Costs to Respond to the Public Health Emergency: The state has already incurred significant costs in responding to the COVID-19 emergency. Examples of these expenses include leasing medical centers to expand the state’s hospital and laboratory capacity, purchasing and refurbishing of medical supplies, and providing testing and treatment services to COVID-19 patients.
  • Higher Indirect Costs as a Result of Changes in the Economy: The state will incur higher indirect costs from changes in the state’s economic circumstances resulting from the COVID-19 emergency. As unemployment rises and incomes fall, more residents will qualify for means-tested programs, including food assistance. In previous recessions, these types of costs have risen by low billions of dollars.
  • Lower Revenues as a Result of Changes in the Economy: The largest budgetary impact of the COVID-19 emergency is likely to arise as a result of lower revenues. The length and severity of the public health emergency will drive the severity of the economic disruption and the ensuing revenue implications.

The LAO examines a series of recent federal legislative actions that has directed funding to states, local governments, and other entities to respond to the COVID-19 emergency. These federal legislative actions include the Coronavirus Preparedness and Response Act, the Families First Coronavirus Response Act (FFCRA), and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The LAO provides a detailed analysis of these funding sources and its impact on state and local budgets, as well as on key areas such as health care, unemployment, and education.

Ultimately, the LAO determines the various recent actions by the federal government will mitigate some of the adverse budgetary impacts caused by COVID-19. However, only a small portion of the federal funding allocated to date—additional Medi-Cal funding—will assist the state with the most significant source of budgetary strain that is likely to result from COVID-19: lower revenues. According to the LAO, additional federal action to support the economic and revenue consequences of this emergency could be warranted.

The full LAO post is available here.