California Projected A $6 Billion Budget Surplus In January. Now, Its Deficit Forecast Tops A Daunting $54 Billion.
With tax revenue drastically down and demand for social services soaring during the pandemic, California's financial outlook has reversed and the state now faces a $54 billion budget deficit. California Gov. Gavin Newsom (D) says the state's reserve will only go so far and calls on the federal government to provide emergency funding. Other coronavirus-related news out of the state reports on hospitals' financial crunch, ongoing equipment shortages and questions about the distribution of COVID-19 medicines.
San Francisco Chronicle:
California Coronavirus Budget Is Grim: Deficit Tops $54 Billion
California is facing a deficit of more than $54 billion in its upcoming state budget as tax revenue plummets and the demand for social services soars amid the coronavirus pandemic. The updated projection, released Thursday by the state Department of Finance, is the latest sign of how badly California’s economy has been battered since the pandemic took hold less than three months ago. Gov. Gavin Newsom said a multibillion-dollar budget reserve would be of some help, but he also pleaded for Washington to come to the state’s rescue with bailout money. (Koseff, 5/7)
The Wall Street Journal:
Coronavirus Brings California Mass Unemployment, Huge Budget Hole, Governor Says
California will grapple with surging unemployment and a huge budget deficit this year, the governor’s finance office said Thursday, sketching a grim forecast for one of many states reeling from a coronavirus-induced recession. With much economic activity ground to a halt due to stay-at-home orders meant to combat the coronavirus pandemic, tax revenue is plummeting in California and other states at the same time spending is climbing to cope with the fallout. (Lazo and Harrison, 5/7)
California Faces Projected $54 Billion Deficit Through Summer 2021
California faces the worst budget deficit in the state's history, at $54 billion. That's according to an analysis released Thursday by the state Department of Finance. The projected shortfall comes after a $21 billion surplus last year, and as the state continues to reel from the coronavirus pandemic, which has thrown more than 4 million Californians into unemployment. (Kim, 5/8)
California Hospitals Ask Governor For $1 Billion In Immediate Aid
The California Hospital Association said Thursday it estimates the state's more than 400 hospitals have collectively lost more than $10 billion as a result of reduced revenue from surgeries and other procedures and higher labor and supply costs amid the pandemic. The organization expects that to rise at least another $5 billion. (Bannow, 5/7)
Does California Need A Defense Production Act For Medical Supplies?
Governor Gavin Newsom called the scramble for supplies "The wild, wild, west"— a months-long free-for-all by state and local governments to purchase protective equipment, ventilators and testing supplies needed on the front lines of the fight against COVID-19. A lack of coordination by the federal government left states like California on their own to negotiate contracts for goods desperately needed to protect health care workers and safeguard the re-opening of businesses as the world attempts to respond to a global pandemic. (Marzorati, 5/7)
San Francisco Chronicle:
UCSF Medical Workers Question Federal Distribution Of COVID-19 Medicine
The distribution of a promising drug by the federal government to hospitals with COVID-19 patients has raised hackles among medical professionals after UCSF and many other medical centers with critical patients weren’t given a single dose. The experimental drug, remdesivir, reduced coronavirus symptoms in clinical trials and was approved last week by the U.S. Food and Drug Administration under what is called an emergency use authorization, but only two of the 25 medical centers that got the drug were in California. (Fimrite and Morris, 5/7)