May 21, 2020
Federal:
Speaker Pelosi unveiled her latest legislative proposal, HR 6800, the “Health and Economic Recovery Omnibus Emergency Solutions Act” (HEROES Act) or read the summary. Of note, the proposal includes beefed-up stimulus payments of up to $6,000 per family, $1 trillion to local governments to pay for essential front-line workers, $75 billion for increased testing and tracing, and $10 billion for economic injury disaster loans dedicated to businesses, among other things. Initial reactions from Senate Republicans indicate that the negotiations have a long road if they are to be successful at all. The vote is expected for Friday. Conversely, some in Republican leadership who have said they will not be supportive of the legislation, have referenced legislation they intend to introduce that will focus on protecting employers from litigation (employer liability is broken down in a thorough article here).
In addition, members of the House of Representatives will consider a vote to give a 21st-century update to House rules. This includes temporary proxy voting and remote committee work, so members can remain at home amid the pandemic.
Fannie Mae and Freddie Mac have announced that borrowers in forbearance will be allowed to pay their missed payments at the end of their loan, providing some clarity and likely some relief.
International:
The Mexican federal government announced their Reopening Plan comprised of three phases:
- Phase 1: Reopening of 269 municipalities across 15 states with no registered COVID-19 cases on May 18
- Phase 2: From May 18 to 31 prepare for a general reopening. Additionally, construction, mining, and automotive and transportation equipment manufacturing will be added to the list of essential activities.
- Phase 3: Starting June 1, social, economic, and educational activities will begin to reopen regionally in stages following a “traffic light-like” system that outlines which sectors and activities may resume operations and when.
The President stated the plan is to serve as a guide but is not mandatory, leaving it up to each state and city to determine timing based on their circumstances. The State of Baja is expected to announce a state-specific plan next week.
The federal government is also working on the development of best practices and protocols per industry to guide businesses as they gradually resume operations. You may also refer to Baja’s Secretariat of Health Manual for Creating COVID-19-Free WorkSpaces for guidance (available here in Spanish).
State:
Moments ago, the Governor released his May revise, which tries to tackle the $53 billion shortfall caused by the coronavirus. The Governor was clear in his request to the federal government to pass legislation (specifically the HEROES Act) to help soften the blow, but he also outlined other components in a four-slide presentation that highlighted the dramatic change in economic circumstances from January’s proposal to today. Of note, he expects unemployment in the state to peak at just under 25% in the state, and cited that “these are not normal numbers.” The state stands to receive funds from the CARES Act that will make up 15% of the relief measures for the state, but that relief is paired with pulling down reserve funding ($7.8B in this year), and budgetary deferrals and maneuvers. First-year businesses will be exempt from the $800 minimum franchise tax, in addition to augmenting the small business loan guarantee program. Read the summary here. The budget deadline is June 15th.
As budgetary discussions continue to progress, Senate leadership has announced a budgetary strategy focused on mortgage/rent relief and economic stabilization, spearheaded by Senate Pro Tem Atkins.
California’s general election in November will be done via mail, per an announcement by the Governor. This does allow for some in-person voting to occur, however, for those that need it.
Earlier this week, the Governor also announced that California was moving further into Stage 2 of reopening. Additional low-risk businesses are now allowed to operate under new health and safety protocols if local counties meet specific testing protocols and are successful at reducing cases of the coronavirus. This includes offices for those unable to telework, shopping malls, and dine-in service at restaurants. The additional guidance from the state on dine-in restaurants can be found here.
Local:
Mayor Kevin Faulconer and Supervisor Greg Cox joined together to urge Governor Newsom to allow more flexibility for localities trying to open. They authored a joint letter outlining the importance of a safe reopening which can be found here. Adding to the pressure on the Governor to ease restrictions to reopening is a series of lawsuits from a variety of individuals and businesses across the state.
On Tuesday, the County announced shopping malls can reopen for pick up service only. In addition, car washes, pet groomers, landscaping, and gardening businesses, and outdoor museums can reopen but all businesses must complete and post their Safe Reopening Plan before doing so. Yesterday, the County announced the gradual, safe reopening of County offices will begin tomorrow, May 15. The County also issued guidance for drive-thru celebrations for upcoming 2020 graduations (congrats, grads!). Friendly reminder that public gatherings are still prohibited, despite easing of restrictions on businesses reopening and more recreational activities resuming.
On Wednesday, the City Council’s Rules Committee considered a number of items for the November ballot, including a measure to remove the coastal height limit in the Midway-Pacific Highway neighborhood and a measure to switch to rank choice voting with a top-four primary. The proposal to waive the coastal height limit was brought forward by Councilmembers Cambell and Cate and with a 4-1 vote, will move forward.
The City of San Diego will release its revised budget on Tuesday, May 19. Related, in our Public Policy Committee meeting, we learned that the current budget proposal plans for only 3 measures on the ballot, so additional measures will require that appropriate corresponding funding be identified.
The County Board of Supervisors is scheduled to meet next Tuesday, May 19, and Wednesday, May 20. In-person attendance remains prohibited. Information on how to participate in the teleconference, view online, or submit comments can be found here. The agenda and supporting documents for Tuesday are here and Wednesday, here.