May 8, 2020 Edition

Newsom Administration Announces Statewide Move into Stage 2 of Pandemic Roadmap, Details Local Variance Processes

This week, the Newsom Administration announced a series of actions as the state moves into Stage 2 of California’s Pandemic Resilience Roadmap, allowing certain businesses to reopen as soon as today. Below, we highlight those actions:

Statewide Report Card

On Monday, Governor Gavin Newsom released a report card detailing how the state has made progress in meeting key indicators for moving into Stage 2. Specifically, California is on track in the areas of hospitalizations, PPE inventory, healthcare surge capacity, testing capacity, contact tracing capacity, and public health guidance.

With this progress, the Newsom Administration determined the state is ready to begin its early moves into Stage 2 of the roadmap by allowing certain curbside retail, manufacturing, and logistics businesses to reopen statewide if they can meet guidelines detailed by the state. Among the businesses that can reopen as early as today are bookstores, clothing stores, florists, and sporting goods stores. Notably, other sectors such as offices, dine-in restaurants, shopping malls, and schools are part of a later Stage 2 opening (or available through local variances).

To support this move, CDPH Director and State Public Health Office Dr. Sonia Angell on Thursday evening issued an updated statewide public health order detailing the statewide move into Stage 2 and processes for reopening specific sectors.

Local Variance Processes

As part of the Newsom Administration’s announcement this week on the statewide move into Stage 2, counties are provided the opportunity to move more quickly through Stage 2 under an attestation that they meet a series of state readiness criteria. Moving more quickly into Stage 2 will allow certain jurisdictions to reopen specified sectors and settings, including destination retail settings (e.g. shopping malls and swap meets), personal services (limited to car washes, pet grooming, tanning facilities, landscape gardening), office-based businesses, dine-in restaurants, outdoor museums and open gallery spaces, and schools and childcare settings.

The California Department of Public Health (CDPH) issued a memo to county governments detailing requirements of local jurisdictions in assessing its readiness for variance. Local governments must submit a variance attestation form to CDPH which will be posted publicly on CDPH’s website.

Local jurisdictions wishing to move more quickly through Stage 2 must attest through the form that the jurisdiction meets readiness criteria around epidemiologic stability, protection of Stage 1 essential workers, testing capacity, containment capacity, hospital capacity, vulnerable populations, sectors and timelines, and triggers for adjusting modifications. CDPH is also strongly encouraging local jurisdictions requesting variance to develop COVID-19 containment plans around surge capacity, employee and workplace protections, and special considerations.

Industry-Specific Guidelines

The Newsom Administration also rolled out industry-specific guidance for each early Stage 2 business that is allowed to reopen. To be allowed to reopen, specified businesses must perform a detailed risk assessment and implement a site-specific protection plan, train employees on how to limit the transmission of COVID-19, implement individual control measures and screenings, implement disinfecting protocols, and implement physical distancing guidelines. Guidelines, including checklists, are available for 17 industries, including agriculture and livestock, construction, manufacturing, and retail. 

Notably, the Administration continues to specify industries and businesses that are not in Stage 1 or 2 due to higher risk associated with the businesses; among the industries included are personal services (e.g. nail salons, tattoo parlors, gyms, and fitness studios), hospitality services (e.g. bars and lounges), entertainment venues (e.g. movie theaters, gaming facilities, and pro sports), indoor museums, kids museums and gallery spaces, zoos, and libraries, community centers (e.g. public pools, playgrounds, and picnic areas), religious services and cultural ceremonies, nightclubs, concert venues, festivals, theme parks, and hotels/lodging for leisure and tourism.

Additional information from the Newsom Administration is available here and here.

Assembly Resumes In-Person Legislative Activities, Legislature Faces Modified Processes

On Monday, the California State Assembly returned to Sacramento following its unprecedented emergency recess in March in light of the COVID-19 pandemic. As we highlighted last week, Assembly Speaker Anthony Rendon ordered a series of modifications at the Capitol to ensure public health and safety, including health screening and controlled movement within the Capitol building, to mitigate risks of COVID-19 transmission. Several policy committee hearings were convened this week in the Assembly Chambers with remote witness testimony via videoconference or telephone, public comment via telephone, and limited in-person public admission.

Similarly, with the Senate set to return on Monday, May 11, Senate President pro Tempore detailed a number of modifications, including limited in-person staff attendance, no floor sessions, health screenings for visitors, and coordinated movement to committee rooms.

Looking ahead, the Legislature faces significantly modified processes relative to budget and policy committee hearings, deadlines, and stakeholder and public engagement. Both the Senate and Assembly will have limited committee hearings between now and May 29 with many committees convening only one hearing for a limited number of bills.

Relatedly, at the direction of legislative leaders, lawmakers have shelved a number of measures given compressed legislative timelines and budgetary conditions. CHEAC continues to engage with legislator offices regarding their intent to move forward with certain measures. As indicated on this week’s CHEAC Weekly Bill Chart, we have noted both measures that will not be moving forward this year and measures that will be dropped from the bill chart due to limited staff capacity. Below, we highlight several updates and new bills added to the bill chart this week.

Public Health Workforce

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

CHEAC’s sponsored measure, AB 3224 by Assembly Member Freddie Rodriguez, was significantly amended this week. Recall, the measure was previously related to local health department (LHD) sexually transmitted disease (STD) navigation services. However, in light of the COVID-19 pandemic and projected budget challenges, the measure has since been amended to require the California Department of Public Health (CDPH) to contract with an entity to conduct an evaluation of the adequacy of LHD infrastructure throughout the state, including future staffing, workforce, and resource needs. CDPH is also required to convene an advisory group to oversee the process of selecting an evaluation entity and to provide oversight and technical assistance to the entity. An evaluation report is due to the Legislature on or before July 1, 2022. The measure will be heard in the Assembly Health Committee on May 18.

Communicable Disease Control

SB 932 (Wiener) as amended May 5, 2020 – OPPOSE

Senator Scott Wiener recently significantly amended SB 932 to require CDPH and local health officers to collect sexual orientation and gender identity data from individuals diagnosed with COVID-19. CHEAC has joined the Health Officers Association of California (HOAC) in opposing the measure due to the significant workload and resources required of the potential mandate amid the ongoing public health emergency.

Environmental Health

AB 3336 (Carrillo) as amended on May 4, 2020 – WATCH

Assembly Member Wendy Carrillo’s AB 3336 would add to the definition of “food handler” in the California Retail Food Code an individual who transports or delivers ready-to-eat food from a food facility for a third-party delivery service. Third-party food delivery food handlers would be required to obtain a valid food handler card, ensure food is protected from contamination, and maintain potentially hazardous foods at required holding temperatures. Bags and containers used for transport would also be required to be tamper-evident prior to the food handler taking possession of the items at the food facility. The measure further specifies that enforcement officers may recover from a third-party food delivery service reasonable costs associated with enforcing the requirements against food handlers. The measure is sponsored by the California Association of Environmental Health Administrators (CAEHA) and will be heard in the Assembly Health Committee on May 18.

Tobacco Control

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

Senator Jerry Hill’s SB 793 would prohibit a tobacco retailer, including a tobacco retailer’s agents or employees, from selling any flavored tobacco product or a tobacco product flavor enhancer. The prohibition includes mint and menthol products and sets forth violation penalties. SB 793 will be heard in the Senate Health Committee on May 13.

Legislature Holds Two COVID-19 Pandemic Informational Hearings

This week, the Assembly Budget Subcommittee No. 1 on Health and Human Services and the Senate Special Committee on Pandemic Emergency Response each held informational hearings on the ongoing COVID-19 pandemic. Below, we detail these hearings:

Assembly Sub. 1 Examines Health Care Workforce, Safety Net Programs

On Monday, the Assembly Budget Subcommittee No. 1 convened an informational hearing to examine critical health and human services issues in light of the COVID-19 pandemic. In opening the hearing, Subcommittee No. 1 Chair Assembly Member Joaquin Arambula discussed the far-reaching impacts of COVID-19 on the state’s sectors and residents, including on safety net programs, unemployment insurance, and food banks. Arambula noted that although the hearing focused only on two issues, numerous other issues requiring attention have also emerged, including public health infrastructure and workforce and skilled nursing facilities. Monday’s hearing consisted of two panels featuring representatives from the health care delivery system, health plans and insurers, labor, the Legislative Analyst’s Office (LAO), and the Newsom Administration.

The first panel explored California’s health care system and workforce, including the provision of services during the pandemic, financial status of the health care system, health plan and insurer performance, health care worker supports, and needed economic investments or interventions that should be considered by the Legislature. Ben Johnson from the LAO provided an overview of the experience of the health care delivery system throughout the state during the COVID-19 pandemic, including economic and workforce impacts. Dr. Bradley Gilbert from the Department of Health Care Services (DHCS) and Shelley Rouillard from the Department of Managed Health Care (DMHC) detailed their departments’ monitoring and oversight activities of health plans during the pandemic, as well as financial and workforce impacts to health plans as a result of the pandemic.

The California Hospital Association (CHA) and the California Medical Association (CMA) detailed experiences of hospitals and physicians amid COVID-19, including decreased patient volumes and revenues, increased hospital costs borne by meeting COVID-19 hospital surge capacity, and workforce impacts on health care workers. Other panelists included the California Association of Health Plans, SEIU California, and Health Access California discussing health coverage efforts, workforce impacts, consumer protections, and health service availability and access during COVID-19. Notably, SEIU California discussed at length the historic underfunding of local health departments (LHDs) throughout the state and nation and significant public health investments necessary to supporting the reopening of our state and the ongoing protection of the public’s health.

The hearing’s second panel explored safety net programs and featured representatives from the California Department of Social Services (CDSS), Department of Developmental Services (CDDS), and California Department of Aging (CDA). State representatives provided overviews of safety net benefits, including food and work assistance, child welfare and adult protective services impacts, homelessness, developmental services needs, and older adult needs during the COVID-19 pandemic. Other panelists included County Welfare Directors Association (CWDA) Executive Director Frank Mecca, a CalWORKs recipient, and SEIU California. The majority of updates and information provided during the second panel focused on various emergency investments and actions from federal and state governments to support vulnerable populations in California, as well as remaining actions needed to further support these populations as the state faces challenging economic and budget conditions.

During public comment, CHEAC Executive Director Michelle Gibbons expressed the need to bolster the public health infrastructure, particularly amid the ongoing COVID-19 pandemic. Ms. Gibbons’ comments also highlighted the challenges experienced by local health departments in recruiting and retaining a highly skilled workforce, as well as the cascading detrimental impacts on other sectors and industries when public health is not adequately resourced. In closing the hearing, Assembly Member Joaquin Arambula discussed the growing and intensifying needs of vulnerable populations throughout the state amid the pandemic and expressed hope for limiting impacts on California’s children and families in upcoming budget negotiations.

Monday’s hearing agenda is available here and a video recording of the hearing is available here.

Senate Special Committee Explores Testing and Contact Tracing

On Wednesday, the Senate Special Committee on Pandemic Emergency Response convened its inaugural hearing to explore testing and contact tracing efforts throughout the state in responding to COVID-19. Wednesday’s hearing consisted of two panels, one providing state and local government perspectives and the other around academic and commercial testing activities.

CDPH Assistant Director Dr. Charity Dean and Blue Shield of California President and CEO Paul Markovich, co-chairs of the Governor’s COVID-19 Testing Task Force, began the hearing by providing updates on the progress of the task force, testing access and availability, state guidance on testing eligibility criteria, and testing goals of the Administration moving forward. CDPH Chief Deputy Director Susan Fanelli also discussed efforts around establishing contact tracing capacities throughout the state, including through the reassignment of state employees, launch of the UCSF/UCLA virtual training academy, and development of a statewide data management platform.

Los Angeles County Health Officer Dr. Muntu Davis detailed local health departments’ core functions in surveillance, disease control, communication, and resource coordination in light of the COVID-19 pandemic. Madera County Public Health Director Ms. Sara Bosse discussed local COVID-19 testing efforts, contact tracing challenges in rural counties, health equity issues associated with COVID-19, and areas of needed state support in responding to the pandemic. Ms. Bosse further indicated that no other entity besides local health departments has a statutory mandate to prevent and control the spread of infectious diseases and highlighted the need for locally flexible solutions to adequately prepare for and respond to the next public health threat.

Senate special committee members queried panelists on a wide array of topics, including testing methodologies and capacity to support the state’s move into future stages of its Pandemic Resilience Roadmap, testing availability in rural areas and in pharmacies, privacy protections related to contact tracing, personal protective equipment (PPE) and other supply needs, congregate settings (including state prisons), data reporting requirements, vaccine and immunity development, workplace protections, contact tracing workforce development, and continuity of other public health services amid the pandemic.

The second panel featured updates from UC San Diego and UC San Francisco researchers on diagnostic and antibody testing efforts and developments, Quest Diagnostics on commercial laboratory activities, and the California Pan-Ethnic Health Network (CPEHN) on health equity and disparity considerations.

Public comment featured a series of comments around testing and tracing opt in/out, contact tracing data privacy and data breaches, testing availability, and isolation and quarantine orders Similar to Monday’s Assembly Budget Subcommittee No.1 hearing, CHEAC Executive Director Michelle Gibbons urged the need to bolster local public health capacity and infrastructure and sustain a highly skilled public health workforce into the long-term. Special Committee Chair Senator Lena Gonzalez, in closing the hearing, indicated that additional hearings will be held in the near future around pandemic response and preparedness activities.

Wednesday’s hearing agenda is available here, a background paper is available here, a COVID-19 Testing Task Force Update is available here, and a video recording of the hearing is available here.

DOF, LAO Issue Fiscal Outlooks Projecting Significant Budget Deficits

This week, both the Department of Finance (DOF) and the Legislative Analyst’s Office (LAO) issued fiscal updates detailing projected budget deficits amid the ongoing COVID-19 pandemic. The reports were released ahead of next week’s May Revise budget that is expected to be released by Governor Gavin Newsom on Thursday, May 14. Below, we highlight the two reports:

DOF Projects a $54.3 Billion Deficit, 18 Percent Unemployment

On Thursday, the Newsom Administration’s Department of Finance (DOF) issued a fiscal update detailing DOF’s May Revision forecast in light of the ongoing COVID-19 pandemic. The report assesses the pre-pandemic budget and economy which featured an unemployment rate (3.9 percent) one-third of its Great Recession peak (12.3 percent), a $5.6 billion surplus, and a record level of reserves ($21 billion in FY 2020-21, including $18 billion projected in the state’s Rainy Day Fund).

However, the rapid onset of the COVID-19 pandemic has exacted an immediate and severe impact on California’s budget and economy, including significant numbers of job losses and unemployment insurance claims. Notably, DOF projects the 2020 unemployment rate will be 18 percent, representing a much higher rate than during the Great Recession. DOF further projects that the state’s three main General Fund revenue sources are projected to drop in 2020-21; those drops include a 25.5 percent decline in personal income tax, a 27.2 percent decline in sales and use tax, and a 22.7 percent decline in corporation tax. General Fund revenues are expected to decline by $41.2 billion below January projections.

Given the projected General Fund declines, combined with $7.1 billion in caseload increases supporting health and human services programs and $6 billion in other expenditures (largely due to COVID-19 response activities), DOF projects an overall budget deficit of approximately $54.3 billion ($13.4 billion from the current year and $40.9 billion in the budget year). The overall projected deficit is equal to nearly 37 percent of General Fund spending authorized in the 2019 Budget Act and nearly three- and one-half times the revised balance of the Rainy Day Fund ($16 billion). Despite the unprecedented loss of jobs and income due to COVID-19, DOF’s projected deficit as a percent of General Fund spending is modestly smaller than budget deficits faced by the state in 2003 and 2009.

The full DOF fiscal update is available here.

LAO Predicts a $18 Billion to $31 Billion Budget Problem, Deficits for Years to Come

This morning, the Legislative Analyst’s Office (LAO) released its spring fiscal outlook providing the Legislature an overview of the significant budget implications as a result of the COVID-19 pandemic. The LAO’s report focuses on the potential size of the budget problem by assuming a baseline level of expenditures; the LAO indicates the May Revise budget that will be released next week will include different revenue estimates and expenditure proposals than what the LAO used in its assessment of the budget problem. As such, the LAO aims to provide the Legislature a sense of an estimated baseline budget problem going into the May Revision and to assist lawmakers “for the tremendous fiscal challenges ahead.”

In its projections, the LAO details two scenarios in which the state will face significant budget deficits. In a “somewhat optimistic” U-shaped recession assumption, the LAO projects California will have to address an $18 billion budget problem. In a “somewhat pessimistic” L-shaped recession assumption, the LAO projects California will face a $31 billion budget problem. The LAO indicates the Newsom Administration’s estimates are substantially larger than the higher range of its own estimate largely because the DOF focuses on gross changes to the budget’s bottom line while the LAO’s estimates include the net effects of current law.

Moreover, the LAO estimates the newly emergent fiscal challenges are likely to persist well beyond the COVID-19 pandemic emergency. Under both LAO projections, budget deficits continue into at least 2023-24. Over the entire multiyear projection period, deficits total $64 billion in the U-shaped recession and $126 billion in the L-shaped recession.

In responding to the projected budget deficits, the LAO indicates California’s budget reserves totaling approximately $16 billion are insufficient to cover the project deficit amounts. Even with budget reserves at around $16 billion, the LAO determines the Legislature could only have access to $10 billion of its reserves in 2020-21 due to constitutional rules governing use of the state’s main reserve account. Notably, the LAO discusses that unlike previous recessions when the state had virtually no reserves and had to make immediate deep budget cuts, California has now established a sizeable budget reserve which will provide some cushion in the upcoming budget crunch.

In rounding out its report, the LAO provides the Legislature a series of recommendations in addressing the projected budget shortfall. For the 2020-21 budget, the LAO recommends using reserves, reducing expenditures, increasing revenues, and shifting costs. While programmatic reductions will be necessary to address the budget problem, the LAO encourages the Legislature to mitigation actions that could worsen the current public health emergency or compound personal economic hardships facing Californians. Given the likelihood of a multiyear budget problem, the LAO further urges the Legislature to consider ongoing solutions to bring the budget into structural alignment and to begin making difficult budget decisions in June as opposed to waiting for future budgets.

The full LAO Spring Fiscal Outlook is available here.

Newsom Issues Executive Orders on CalWORKs, Pandemic Roadmap, Elections, Others

Governor Gavin Newsom issued a number of executive orders within the past week related to the COVID-19 pandemic. Below, we highlight these orders:

CalWORKs Enrollment

Governor Newsom late last week issued Executive Order N-59-20 temporarily broadening the capability of counties to enroll persons into the California Work Opportunity and Responsibility to Kids (CalWORKs) program using various eligibility verification methods. The provisions allow for temporary self-attestation of pregnancy and conditions of eligibility and allow individuals to waive in-person identification requirements. The order also expands the opportunity for individuals to qualify for a limited amount of lump-sum financial assistance instead of receiving CalWORKs, as long as their income is below 200 percent of the Federal Poverty Level (FPL) and supports families by suspending the requirement for county welfare departments to consider the Federal Pandemic Unemployment Compensation as income when determining CalWORKs grant amounts.

Pandemic Roadmap Local Variance

On Monday, Governor Newsom issued Executive Order N-60-20 directing the state public health officer to establish criteria to determine whether and how, in light of local conditions, local health officers may implement public health measures less restrictive than the statewide public health directives. Counties must meet specified criteria around COVID-19 cases, testing and contact tracing capacity, health care system preparedness, and vulnerable population protection plans. As detailed on Thursday, the Administration rolled out processes required of counties in implementing variances to Stage 2 of the Pandemic Resilience Roadmap.

Property Tax Penalty Waivers

Executive Order N-61-20 was issued by Governor Newsom on Wednesday waiving penalties for property taxes paid after April 10 for taxpayers who demonstrate they have experienced financial hardship due to the COVID-19 pandemic through May 6, 2021. The order applies to residential properties and small businesses and extends the deadline for certain businesses to file Business Personal Property Statements to May 31, 2020, to avoid penalties.

Workers’ Compensation Benefits Expansion

Governor Newsom also on Wednesday issued Executive Order N-62-20 creating a time-limited rebuttable presumption for accessing workers’ compensation benefits applicable to Californians who must work outside of their homes during the statewide stay-at-home order. Individuals eligible will have the rebuttable presumption in workers’ compensation claims if they tested positive for COVID-19 or were diagnosed with COVID-19 and confirmed by a positive test within 14 days of performing a labor or service at a place of work after the stay at home order was issued on March 19, 2020. The presumption will stay in place for 60 days following the issuance of the executive order.

Various Deadline Extensions

Today, Governor Newsom issued Executive Order N-63-20 extending various deadlines for certification requirements for public school project inspectors, extending expiration dates for notaries public whose commissions are set to expire, extending procedural deadlines of the Department of Industrial Relations, and allowing retired peace officers to be temporarily be reemployed for up to a year if they left the agency in good standing. The order also authorizes remote reporting under the Sex Offender Registration Act consistent with state public health guidance.

November General Election

Governor Newsom signed Executive Order N-64-20 requiring each county’s elections officials send vote-by-mail ballots for the November 3, 2020, General Election to all registered voters. Californians who may need access to in-person voting opportunities will still be able to access in-person services. The Newsom Administration indicated it will continue working with the Legislature and Secretary of State to determine how requirements for in-person voting opportunities and other details of the November election will be implemented while preserving public health. If by May 30, 2020, counties do not yet have clarity for in-person voting opportunities and other details of the November election, the Administration notes an additional executive order may be needed.

NACCHO, ASTHO Roll Out Contact Tracing Workforce Estimator Tool

This week, the National Association of County and City Health Officials (NACCHO) and the Association of State and Territorial Health Officials (ASTHO), in partnership with the George Washington University, launched a contact tracing estimator tool to assist local and state health departments in determining workforce needs amid the COVID-19 pandemic. The tool allows users to input various criteria and assumptions to determine the number of staff needed to effectively identify and trace individuals who have been in contact with new cases of COVID-19 to slow the transmission of the virus.

The tool is available here.