Reopening and Legislative Oversight

The following update is provided courtesy of Edelstein Gilbert Robson & Smith

As we have reported previously, Governor Newsom has enjoyed enormous power since the beginning of the COVID-19 crisis both legally, under the Emergency Services Act, and politically, given the hundreds of thousands of viewers tuning in to watch his noon press conferences almost daily. Now, two months into the crisis, the Governor is slowly being forced to yield some of that power and share the stage with others. 

Three weeks ago, as the state was poised to begin slowly reopening the state’s economy, Governor Newsom closed Southern California beaches that were becoming crowded with the arrival of warm weather. This action was met with immediate pushback and disregard of the state’s order as swimmers and surfers continued to flock to the beach. The Governor quickly negotiated guidelines for reopening beaches with local officials. 

This pattern of state order followed by local protest, pressure, and defiance resulting in the issuance of new easier to meet criteria has repeated itself several times since. Two weeks ago the Governor modified the state’s shelter in place order pushing California into the initial stage of Phase 2 of his plan for reopening. Phase 2 includes curb-side retail, manufacturing, logistics, childcare for those outside of the essential workforce, office-based businesses, car washes, pet grooming, landscape gardening, outdoor museums, and some modified visiting of public places. This modified shelter in place order was quickly followed by guidance allowing counties that self-attest to move further into Phase 2 than the rest of the state. 

However, that guidance required counties to report zero deaths for two weeks prior to reopening faster than the state, a challenging standard for most Counties. The new guidance was met with outright defiance in the state’s politically conservative and rural north. Meanwhile, four urban Counties in Southern California pushed back on the Governor, formally requesting new criteria that would allow them to reopen. Consequently, this week the Governor announced new guidance that counties will have to meet for further regional variances. If counties meet this new self-attestation, they can move into modified dine-in service at restaurants and modified shopping at shopping centers. Critically, this guidance dropped the zero deaths requirement. 53 of California’s 58 Counties will qualify to move faster than the state. 39 have already done so. 

Governor Newsom has handled all of this deftly. In each case, he has made a tactical retreat in the face of protest and local government pressure but maintained appearances by doing so under the guise of new guidance and respect for the decisions of local governments and public health officials. 

The Governor also continues to face increased scrutiny and pressure from the Legislature. With the June 15 deadline to pass a balanced state budget looming, the Governor has need of the Legislature for the first time in two months. While the massive deficit the state is facing due to COVID-19 leaves little room for the Legislature to leverage the Governor in budget negotiations, consideration of his revised budget proposal provides an opportunity to critique and question the Governor’s efforts to date and going forward. 

It is also noteworthy that upon its return to Sacramento the Senate stated its priorities for the budget two days before the Governor released his May Revision to the budget. Specifically, the Senate is calling for the creation of a $25 billion recovery fund paid for by issuing vouchers to those willing to prepay future tax liabilities. Another proposal would introduce a complicated scheme where landlords forgave back due rent owed by tenants in exchange for transferrable tax credits. These ideas are novel but extremely aspirational and there is plenty of reason to believe that they won’t come to fruition. Nevertheless, the choice to publicly outline their own priorities and daylight them ahead of the Governor’s own budget shows that legislators are ready to put themselves back into the spotlight. 

We will keep you apprised of further developments.