California seems headed for even more restrictions as negative metrics around the coronavirus pandemic continue to surge past record levels.
In a video conference, Gov. Gavin Newsom alluded to the “prospect of additional restrictions in the coming days and weeks,” beyond the state’s current “limited” lockdown with an overnight curfew. Given the state is seeing increases in all metrics of the ongoing pandemic, including the number of people newly infected with COVID-19, up to an average of more than 14,000 a day; positivity rate, up to 6.2 percent from 4.3 percent two weeks ago, and daily hospitalizations and deaths almost doubled compared to two weeks ago, Newsom laid some groundwork for businesses to seek relief, should they be impacted by further measures to combat the spread.
“Particularly for our small business, if we’re talking more restrictions of nonessential businesses… we have to be more mindful than ever of the economic impact and consequences of these further restrictions,” Newsom said.
Any new restrictions could look similar to what has been implemented in Los Angeles, the most populated county in California and one that, as of Monday, reverted to stricter limitations on gatherings and capacity limits for businesses. Essential businesses like grocery stores, for instance, are now limited to 35 percent capacity after being at 50 percent. Nonessential retail remains open, but at 20 percent capacity, down from 25 percent. Gatherings with people outside of a household are prohibited, excepting outdoor religious services and political protest. Restaurants have to suspend outdoor dining and revert to take-out only. The city has so far avoided another lockdown order, but Mayor Eric Garcetti has urged a self-lockdown, telling people to stay indoors as much as possible by choice, as the county sees its own surge in COVID-19 cases.
For several months, California has been allowing counties to lift coronavirus restrictions based on a color-coded tier system based on the number of cases relative to population and hospital capacity. While most of the state had managed to get into looser tiers over the summer, now almost the entire state is in the purple tier, or the most restrictive, given the current number of cases. The virus is surging nationally as well, up 8 percent over the last two weeks, at close to 140,000 new cases a day. Hospitalizations are up 36 percent. California ranked 39th in the country among states with most new cases relative to its population.
But should the state’s restrictions get even tighter, as seems inevitable, California has some new efforts in place to aid small businesses.
Newsom said Monday that California will defer any sales tax payments for at least the next three months for companies and businesses doing up to $1 million in sales. The state has also suspended the franchise tax for any new business and it will not collect tax on any funds a company received from a PPP loan this year. The state is also launching a new “emergency relief package” as a bridge between now and the next legislative session, which Newsom said will create more substantive relief for businesses.
Part of the new bridge package is a new $500 million grant program that offers up to $25,000 for businesses in the state, as well as nonprofits and cultural institutions, like museums. Another aspect is a “public-private” investment fund of $125 million for businesses, $86 million of which has been matched already. And another part of the package is a “Main Street tax credit,” which gives businesses $1,000 per new qualified employee they hire, up to $100,000. Newsom in large part credited such “direct relief” efforts to Janet Yellen, who has just been selected by President-elect Joe Biden to be the new Treasury Secretary.
“She was a very active participant in our economic task force,” Newsom said of the efforts. But he also recognized that even hundreds of millions of dollars in aid to businesses is not enough relief for businesses that, if they managed to stay afloat at all, will have likely spent almost an entire year operating under varying levels of restrictions.
“We recognize we have to do more work at the legislature… we cant do this alone,” the governor said. “We need Congress to act with urgency.”
Congress last passed a relief bill in May and talks of a further releif package were highly politicized in the run up to the November election. But Newsom seemed hopeful that further restrictions in California will not be quite as broad as they were at the start of the pandemic, not least because the state is slated to get almost 350,000 doses of the new vaccine for the coronavirus, likely in a few weeks time.
“We’re trying to be more specific, more surgical, more prescriptive, and go sector by sector and region by region,” Newsom said, referring to COVID-19 restrictions. He in no way blamed businesses for their handling of pandemic restrictions for why the virus is surging.
Nor did Mark Ghaly, California’s Secretary of Health and Human Services, who said Monday that there is not one sector of the economy he can point to as a source. He, as many other public health officials have done in recent months, pointed to colder weather forcing people indoors, and an overall “resentment” of the pandemic at large.
“The truth is, it’s just all around our communities right now,” Ghaly said. “We are really in a different situation with transmission than we’ve faced before.”
With that, more restrictions on businesses and the public seem almost inevitable. And sooner than later.
“We’ll be seeing a lot more of you this week,” Newsom said during the conference, speaking directly to the press. “It’s a dynamic week and an important week in the history of this pandemic and I can assure you, we’ll be coming out with some more information in the very near future.”
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