May 15, 2020 Edition

Governor Newsom Releases FY 2020-21 May Revision, Projects $54.3 Billion Budget Shortfall

On Thursday, Governor Gavin Newsom released his FY 2020-21 May Revision budget, reflecting drastically different economic and fiscal conditions from when he unveiled his original budget proposal in early January. Notably, the Newsom Administration projects a $54.3 billion budget deficit, requiring the Administration to draw down a series of reserve funds, withdraw previously proposed investments, and cut a number of programs and services. Slides from the Governor’s press conference are available here.

CHEAC Staff prepared a memo detailing items of most interest to local health departments available here.

Budget subcommittees will hold hearings over the next week to review all items detailed in the Governor’s May Revision. Specifically, Assembly Budget Subcommittee No. 1 on Health and Human Services will hear all health-related items on Tuesday, May 19 and the Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services will hear all health-related items on Saturday, May 23. The Legislature will then work through budget items in order to meet the constitutional deadline to pass a budget on June 15.

Additional May Revision information can be found at the links below:

Governor’s May Revision Summary

California Department of Public Health (CDPH) May Revision Highlights

Department of Health Care Services (DHCS) May Revision Highlights

May Revision Press Conference Video

Senate Returns to Sacramento, Flavored Tobacco Bill Advances

This week, the California State Senate returned to Sacramento following its unprecedented joint recess amid the COVID-19 pandemic. Recall, last week, the Assembly returned to Sacramento to resume its in-person legislative activities, albeit in a significantly modified way to support physical distancing.

With both chambers now back in Sacramento, the Senate and Assembly face compressed legislative and budget timelines to advance measures and pass a state budget. Notably, policy committees have winnowed their bill loads by either not setting bills for hearings or directing lawmakers to prioritize their proposed measures.

Below, we highlight several bills of interest to CHEAC Members. This week’s full CHEAC Weekly Bill Chart is available here. As with last week, bills that are not moving forward per authors’ offices are indicated.

Tobacco Control

SB 793 (Hill) as amended May 5, 2020 – SUPPORT

SB 793 by Senator Jerry Hill was heard in the Senate Health Committee on Wednesday. The measure would prohibit a tobacco retailer from selling or offering for sale any flavored tobacco product or a tobacco product flavor enhancer, including mint and menthol. The measure further specifies that the prohibition does not preempt or prohibit local ordinances restricting such products; if there is an inconsistency between state and local measures, the greater restriction on tobacco access shall prevail.

CHEAC joined a coalition in support of the measure, including sponsors American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, the Campaign for Tobacco-Free Kids, and Common Sense. During the hearing, Senate Health Committee members discussed the concerning trends in youth tobacco use and tobacco marketing tactics, as well as the importance of preventing tobacco consumption. The measure had a significant number of individuals who spoke in opposition to the bill, largely representing hookah retailers and businesses. Despite the opposition to the bill’s inclusion of hookah, SB 793 was advanced from the Senate Health Committee on a bipartisan 8-1 vote. Senator Shannon Grove was the lone ‘no’ vote. The measure now moves to the Senate Appropriations Committee.

Public Health Workforce

AB 3224 (Rodriguez) as amended May 4, 2020 – SUPPORT

Assembly Member Freddie Rodriguez’s AB 3224 will be heard in the Assembly Health Committee on Monday, May 18. AB 3224 is jointly sponsored by CHEAC, HOAC, and SEIU California and would require the California Department of Public Health (CDPH) to contract with an entity to conduct an evaluation of the adequacy of local health department infrastructure, including future staffing, workforce, and resource needs.

Access to Health Services

AB 2164 (R. Rivas) as amended May 11, 2020 – SUPPORT

AB 2164 by Assembly Member Robert Rivas would establish the E-Consult Services and Telehealth Assistance Program within DHCS to award grants to health centers to facilitate doctor-to-doctor consultation services. The measure was amended this week to incorporate language from Assembly Member Rudy Salas’ AB 2007 which would specify that a federally qualified health center (FQHC) and rural health center (RHC) “visit” includes an encounter between a provider or patient using telehealth in synchronous real-time or asynchronous store-and-forward. The measure now further specifies that FQHCs and RHCs would not have to establish an individual as a patient via a face-to-face encounter prior to providing telehealth services. AB 2164 will be heard in the Assembly Health Committee on Monday, May 18.

Western State Leaders Urge Federal Support for State and Local Governments in Responding to COVID-19, House Considers $3 Trillion Relief Package

Amid the ongoing COVID-19 pandemic, federal and state leaders continue to attempt to respond to significant economic relief needs nationwide. Below, we highlight these actions:

Western States Pact Urges $1 Trillion for State and Local Governments

This week, Governor Gavin Newsom announced governors and legislative leaders from California, Colorado, Oregon, Nevada, and Washington sent a letter to Congressional leaders requesting $1 trillion in direct and flexible financial relief for state and local governments amid the COVID-19 pandemic. The letter urges Congress to preserve core government services such as public health, public safety, and public education, as well as assist residents in returning to work. Notably, during Governor Newsom’s May Revision press conference on Thursday, he again plead for federal government support to avoid having to roll back previously proposed investments and cut other programs and services to meet the state’s projected budget shortfall.

U.S. House of Representatives to Vote on HEROES Act

The U.S. House of Representatives is currently in the process of considering the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. At the time of publication, the House continues debate on the measure; a vote is expected later this evening. The sprawling proposal aims to support state and local governments, businesses and employees, and key public health and health services. Specifically, the act would provide nearly $1 trillion to state, local, territorial, and tribal governments, establish a $200 billion hazard pay fund for essential workers, provide a second round of economic impact payments of $1,200 per adult, expand sick leave, unemployment compensation, housing assistance, and nutrition and food assistance, and provide $10 billion for the Economic Injury Disaster Loan Program. Further, $75 billion would be allocated for COVID-19 testing, contact tracing, and isolation measures and workplaces would be required to establish infection control policies and procedures, among other key areas.

House Speaker Nancy Pelosi worked throughout the week to attempt to secure enough Democratic support for the measure, despite most Republicans and some Democrats expressing opposition to the massive relief measure. Even with today’s consideration in the U.S. House, the HEROES Act faces an exceedingly difficult path forward. Senate Majority Leader Mitch McConnell indicated the package was a “totally unserious” proposal and the Trump Administration threatened to veto the measure should it make it to the president’s desk.

While the measure, in its current form, is unlikely to gain further traction, it is widely expected that the House proposal will spark further negotiations among Congressional leaders and the White House to provide additional economic relief amid the ongoing pandemic.

DOF Notifies Legislature of COVID-19 Emergency Fund Augmentations for Contact Tracing, Child Care PPE, Correctional Institutions

Late last week, the Department of Finance (DOF) notified the chairs of the Senate and Assembly Budget and Appropriations Committees of its intent to increase emergency fund expenditures in response to COVID-19. Recall, the Legislature appropriated up to $1 billion in emergency funds to the Newsom Administration in mid-March just prior to taking its unprecedented joint recess. DOF identified the following modifications and increases in funding:

Child Care Facility Personal Protective Equipment (PPE) Amendment

DOF notified the Legislature of its intent to modify provisions of its previous allocation of $50 million to support personal protective equipment and cleaning supplies for child care facilities. DOF indicated the Department of Education (CDE) identified the need to amend provisions to allocate funding through local county offices of education instead of resource and referral agencies.

Contact Tracing Augmentation

DOF also notified the Legislature of its intent to allocate $8.7 million to the California Department of Public Health (CDPH) to support the development of the UCSF-UCLA virtual contact tracing training academy and $18.7 million also to CDPH to support the development of a data management platform for COVID-19 contact tracing activities. DOF indicates that Accenture will launch a contract tracing technology platform developed by Salesforce and run a contact tracing call center in collaboration with Amazon, similar to a system that has been established in Massachusetts. According to DOF, both the contact tracing training and data management platform are to be made available to all local health departments at no cost.

The Joint Legislative Budget Committee (JLBC) responded to DOF’s notification, ultimately concurring with the Newsom Administration’s expenditures. JLBC requested of the Administration a series of information by June 1, including copies of data use agreements between state and local governments around the sharing of personal information collected as a result of contact tracing, safeguards against data breaches and unauthorized data disclosures, and criteria that will be used to determine the deployment and distribution of state staff for contact tracing at the county level. Legislative leaders also request a complete overview of the contact tracing program and the respective role of each contact tracer.

Correctional Institutions Augmentation

DOF notified the Legislature of its intent to allocate $8.6 million to the California Department of Corrections and Rehabilitation (CDCR) to reimburse counties for housing inmates due to the temporary stoppage of prison intake for an additional 30 days in response to COVID-19.

The JLBC also concurred with the spending augmentation but expressed concerns with the increasing COVID-19 outbreak within the state’s correctional facilities. JLBC identified a series of requests of the Newsom Administration around public health guidelines to support physical distancing, intake processes, and quarantine procedures.

DCA, Board of Pharmacy Waive Restrictions on Pharmacist-Conducted COVID-19 Tests

This week, the Department of Consumer Affairs (DCA) and the State Board of Pharmacy waived a series of regulations authorizing pharmacists statewide to collect specimens for COVID-19 tests and order tests for consumers. The specimens will be delivered to and processed at public health, university, or commercial laboratories. The test must be authorized by the U.S. Food and Drug Administration (FDA) and the pharmacist collecting the specimen must be competent and trained in the specimen collection necessary to perform the test.

The waiver is in place for 60 days and may be further extended by the DCA Director. The full order is available here.

Assembly Convenes Oversight Hearing on State Emergency Contracts

On Monday, the Assembly Committee on Accountability and Administrative Review convened an oversight hearing on state contracting in an emergency, particularly amid the COVID-19 pandemic. The hearing, held in the Assembly Chambers to accommodate physical distancing, was opened by Accountability and Administrative Review Chair Cottie Petrie-Norris discussing the state’s rapid response to the pandemic, including procuring millions of items of personal protective equipment (PPE), and its process in entering into contracts and agreements for such items. Chair Petrie-Norris identified a series of priority areas for the hearing, namely lessons learned from the COVID-19 pandemic, vetting protocols and controls implemented based on lessons learned, remaining issues and gaps in state emergency contracting, and the state’s strategy in moving forward in procuring supplies during an emergency.

The hearing featured an overview from the Governor’s Office of Emergency Services (CalOES) Director Mark Ghilarducci and State Treasurer Fiona Ma of the Newsom Administration’s activities in responding to COVID-19, procuring PPE and other critical supplies, and ensuring proper use of taxpayer funds. The Newsom Administration entered into nearly 200 contracts and agreements for supplies and equipment to date to support the state’s response to the COVID-19 pandemic. Notably, in identifying that the state had to cancel or rescind only a handful of contracts due to potentially fraudulent activity, OES Director Ghilarducci indicated, “Not one dime – not one dime – of taxpayer dollars has been lost.” The Newsom Administration has reportedly launched investigations into several of the scrapped contracts and agreements.

A second panel featuring CalOES Director Ghilarducci examined California’s strategy for moving forward, particularly in areas of vetting protocols, supply chain operations, and price gouging and fraud prevention. The Legislative Analyst’s Office (LAO) further provided a presentation on purchasing supplies during an emergency, as well as oversight and transparency roles of the Legislature. The LAO noted that without basic information of the contracts into which the Newsom Administration is entering, the Legislature is limited in its ability to adequately perform its oversight function.

Questions from committee members predominately focused on the state’s vetting procedures, PPE sourcing, PPE distribution and prioritization statewide, publicizing contracts, and use of California manufacturers for future supply and equipment needs. Lawmakers generally commended the Administration for quickly procuring critical supplies and equipment to respond to COVID-19 and looked to the future to strengthen vetting and oversight processes.

The hearing agenda is available here and a background paper is available here. A video recording of the hearing is available here. A roundup of press articles on state contracting is available here. A warrant payment process chart is available here and a CalOES timeline handout is available here

Cannabis Licensing Fees Deferred for 60 Days

The Bureau of Cannabis Control (BCC) announced yesterday that businesses with state commercial cannabis licenses expiring between now and the end of June 30, 2020, may request 60-day deferrals of their license fee payments. This action is intended to provide immediate financial relief to cannabis licensees impacted by COVID-19. BCC will begin to accept requests for fee relief immediately. There are also other ways for licensed cannabis entities to request disaster relief assistance. More information is available here.

Newsom Reappoints Members of CDPH Leadership Team

On Wednesday, Governor Gavin Newsom announced the reappointment of several officials in the California Department of Public Health (CDPH). Among those reappointed are:

  • Brandon Nunes, Chief Deputy Director of Operations – Mr. Nunes has served in this position since 2015. He held several positions at the California Department of Finance from 1999 to 2015 and was confirmed to his CDPH position by the Senate in 2016.
  • Mark Starr, Deputy Director of Environmental Health – Dr. Starr has served in this position since 2012. He was previously director of community health in Placer County from 2007 to 2012 and held several positions in the California Department of Health Care Services from 1995 to 2006.
  • Heidi Steinecker, Deputy Director of the Center for Health Care Quality – Ms. Steinecker has held this position since 2018. She was previously an executive health care consultant at Global Health Consulting and held several positions at the University of California, Davis Medical Center from 2005 to 2017.
  • Monica Wagoner, Deputy Director of Legislative and Governmental Affairs – Ms. Wagoner has held this position since 2007. She was previously a government affairs representative for the California Chapter of the American College of Emergency Physicians and a government affairs manager for Blue Shield of California.

The Governor’s full press announcement is available here.