May 22, 2020

Gilroy Chamber Encourages City Council to Press County to Reopen Economy

Gilroy Chamber Encourages City Council to Press County to Reopen Economy

The Gilroy Chamber of Commerce launched an e-mail campaign last week urging the County Supervisors, County Executive and County Health Officer to re-open our economy. The Chamber has also urged the City Council to press the County to do the same by taking action on one or more of the following items: 

  1. Lead the effort for South County’s return to business by lobbying our County Supervisors and Health Officer.
  2. Ask County Health Officer, Dr. Cody, to specify exactly what needs to be done and by when with regards to a reopen date. A constant moving target is difficult to hit, frustrating for all involved and draining hope out of our business owners. 
  3. Seek special consideration from the County to allow Gilroy businesses to reopen. A community our size should not be held to the same standards as that of a community 20 times our population.

Gilroy Chamber Fights for Independent Contractors

Gilroy Chamber Fights for Independent Contractors

The Gilroy Chamber of Commerce has partnered with CalChamber and other organizations to support SB 806.

SB 806 amends the “B” factor of the ABC test to allow an individual that is providing work outside the usual course of the hiring entity’s business or is performing work outside the physical place of the hiring entity’s business to maintain their status as an independent contractor.  This amendment to the “B” factor is consistent with the majority of other states that have an ABC test for purposes of unemployment insurance and/or worker’s compensation.   It is also consistent with the definition of “usual course of business” in Labor Code section 2810.3.  From a policy perspective, this proposed amendment is also consistent with the nature of an independent contractor, as an individual who is not physically at the same location of the hiring entity, is less likely to be under the hiring entity’s control with regard to how they perform the work.

 SB 806 provides needed balance to AB 5, which codified the ABC test and provides the necessary flexibility to allow individuals who operate as independent contractors to continue to do so.

About $26 Million for 426 Patients

One big sign that the worst of the coronavirus outbreak in California is over — at least for now: Nearly all of the alternate care sites set up to handle a projected surge in coronavirus patients have closed or will close in the next few months, the state announced Wednesday.

Many are closing without having treated a high volume of patients, which means the shelter-in-place strategy worked. But it also means quite a lot of taxpayer money was spent on hospital beds that remained mostly empty.

For example:

  • 65 patients have been treated at the so-called “Los Angeles Surge Hospital,” formerly St. Vincent Medical Center, for which the state paid nearly $15 million, said Rodger Butler, spokesperson for the California Health and Human Services Agency. The facility will close by June 30.
  • 354 patients have been treated at Seton Medical Center in Daly City, for which California has paid $10.4 million, Butler said. It will also close by June 30.
  • Seven patients have been treated at the field hospital set up in the Sacramento Kings’ former basketball arena, for which the state paid $1 million. The facility will close at the end of May.
  • 77 patients were treated on the USNS Mercy naval ship, which left Los Angeles last week to return to its home port of San Diego. (The state only had to pay some “associated costs,” said Cal OES public information officer Bryan May.)

That’s more than $26 million for about 426 patients (not counting the USNS Mercy). In hindsight, some may wonder if the state squandered resources. But at the outset of the pandemic in March, when predictions swirled that 56% of Californians could be infected with coronavirus in a few months, the state was scrambling to ensure it wouldn’t end up with overflowing hospitals like New York and set a goal of obtaining 50,000 hospital beds.

  • Gov. Gavin Newsom on March 19: “Let’s not regret. Let’s not dream of regretting, go back and say, ‘Well, you know what, we coulda, woulda, shoulda.’ Not when the data all points to where I think most of us know we’re going.”

Not all alternate care sites are being shut down. A federal medical station is being deployed to Imperial County, which has the highest per-capita hospitalization rate in the state and which has two hospitals that turned away new coronavirus patients Tuesday after admitting an influx of patients from Mexico.

May 18, 2020

Petition the County Supervisors to Reopen

Santa Clara County Needs to Get Back to Business!

To our business community and community supporters,

The Gilroy Chamber of Commerce believes it’s time to get back to business, safely and responsibly. With no guarantees the shelter in place order will be lifted at the end of May, our businesses deserve a fighting chance to survive.

If you feel compelled to email our County Supervisors and the County Executive Officer, asking them to help make this happen, you may copy and paste the statement below, with the subject line: Let us get back to business

The email addresses for the County Supervisors and County Executive Officer are also listed below.

“I am urging you to convince the County Health Officer, Dr. Cody, to re-open the county’s economy now. According to information provided by her office, businesses located in Santa Clara County are quite capable of implementing social distancing protocols and other safety measures to protect the public. The consequences of a continued shut down will be incalculable and the effects will surely be felt for years to come, but they will continue to worsen every day our businesses are forced to stay closed. The extended shelter in place order is devastating small businesses, workers and our community. Let us get back to business.”

 

mike.wasserman@bos.sccgov.org
dave.cortese@bos.sccgov.org
supervisor.ellenberg@bos.sccgov.org
supervisor.simitian@bos.sccgov.org
cindy.chavez@bos.sccgov.org
Jeff.smith@ceo.sccgov.org
cboliaison@eoc.sccgov.org

 

Thank you for continuing to support the Gilroy Business Community during this time. Let’s get Gilroy and Santa Clara County back to business.

 

Sincerely,

Mark Turner
President/CEO
Gilroy Chamber of Commerce

Popular Cafe and Bakery Chain Specialty's Closing for Good

By Marc Stiles, Staff Writer Puget Sound Business Journal

Specialty’s Café & Bakery, the chain known for its crusty sandwich bread and delectable cookies, is closing permanently.

The 33-year-old chain based in Pleasanton with outposts throughout the Bay Area said on its website that Covid-19 and shelter-in-place policies “have decimated company revenues.”

The last day of operations is Tuesday. The company said it will “reach out to cancel and refund any orders placed for Wednesday, May 20 and beyond.”

It’s an ominous sign for commercial landlords in business districts when a staple for office workers like Specialty’s won’t survive the pandemic. It’s also one of the best examples yet on how work-from-home is going to devastate the economies of downtowns long term.

Specialty’s had 55-plus locations in California, Washington and Illinois, according to its Twitter account. PleasantWeekly.com first reported Specialty’s is closing. The chain late last fall closed its outpost in downtown San Jose because its location in City View Plaza is expected to be demolished and reopened in Coleman Highline next to Avaya Stadium.

The eatery is one of several to close because of the economic effects brought about by the Covid-19 pandemic.

Among the other restaurants that have announced they were going out of business are Emperor Norton’s and Banana Crepe in San Jose, Dan Gordon’s in Palo Alto and Clarke’s Charcoal Broiler in Mountain View.

SBA Releases Instructions to Calculate PPP Loan Forgiveness

By Sari Lesk – Reporter, Milwaukee Business Journal

The U.S. Small Business Administration has released the much-anticipated application and instructions for how Paycheck Protection Program borrowers can see their loans forgiven.

The program was developed through the more than $2 trillion Coronavirus Aid, Relief and Economic Security Act and began with a $349 billion pot. After borrowers depleted those funds in about two weeks, federal authorities replenished the program with $310 billion.

While business owners sought the funds for an infusion of cash that could potentially convert to a grant, questions lingered as to how exactly lenders and the SBA would determine whether borrowers met the terms for forgiveness. The agency rolled the program out quickly and has been updating guidance since the PPP came online.

The document released Friday was created to inform borrowers how to apply for forgiveness of their PPP loans, the SBA said. The agency released the form in consultation with the U.S. Department of the Treasury.

Click here to see the document on the SBA’s website.

The SBA said it would soon issue regulations and guidance to further assist borrowers as they complete their applications. Lenders could also look for guidance on their own responsibilities, the SBA said.

From the start, the agency has said 75% of PPP funds had to be directed toward payroll expenses, while the remainder could be spent on overhead costs like mortgage interest, rent and utility costs.

The application includes a worksheet that details how to calculate the amount of the loan that can be forgiven and provides a summary of costs eligible for forgiveness. The SBA also provided a list of documents borrowers have to submit with their forgiveness applications.

Through the first round of the PPP, the SBA said lenders disbursed about $342.28 billion across 1.66 million loans. As of Friday evening, the SBA reports lenders approved $194.76 billion across 2.75 million applications.

Concerns Raised Over What Happens Once Inmates Released

By CalMatters

California state prisons have released about 3,500 inmates and the daily population in county jails has decreased by 20,000 since late February, raising concerns for criminal justice groups, victims’ rights advocates and public safety proponents alike, the Los Angeles Times reports. With many government offices, transitional shelters and reentry programs closed, released inmates often have nowhere to go and struggle to obtain ID cards, apply for jobs and open bank accounts, something advocates say could cause recidivism. Meanwhile, police agencies say there has been a rise in repeat offenders as former inmates take advantage of the state-ordered zero-bail policy amid the pandemic and continue to commit crimes.

  • Orange County District Attorney Todd Spitzer: “There comes a point where you have to weigh that the inmate might get a particular disease … against the public safety and the propensity that these people might commit crimes against another individual.”

Meet Flippy, the AI Assistant Chef Cooking Up Food at MLB Stadiums for $3/hour

By The Hustle

You ordered your burger medium-rare with mustard and it came out burnt with ketchup. Ugh. 

We call that the quick-service quandary — when the food comes fast, but it’s also unreliable.  

That’s all changing soon though, thanks to a new robot manning the grill at places like Dodgers Stadium and Caliburger: Miso Robotics’ own Flippy, who cooks every burger it touches to absolute perfection like some kind of chrome-plated Guy Fieri. 

Innovate, automate, and elevate the commercial kitchen

Thanks to thermal vision (along with 12 different pending patents), this AI assistant chef is helping to address the challenges facing quick-service restaurants and cloud kitchens:

  • Economical: Flippy’s low hourly cost can give quick-service restaurants a 300% lift in margins
  • Scalable: Flippy has cooked 60K+ lbs of fried food and 12K+ burgers, and counting!
  • Responsible: Flippy makes for a safer work environment by keeping human workers away from dirty and dangerous kitchen tasks 

The cooking chops of this skillful little chef are paying off for his creators, too — Miso Robotics is now in prime position to be one of the main players in automating the up-and-coming cloud kitchen market

 

 

May 15, 2020

It’s Time to Get Back to Business

Editorial by Mark Turner, President/CEO, Gilroy Chamber of Commerce

It’s time to get back to business! With the ability to apply social distancing protocols, implement safety precautions, and take every measure to ensure public health is not compromised, it’s time to get back to business.

At first, the Shelter-in-Place Order issued by the County Health Officer, was to make sure we “flatten the curve.” Then, we didn’t want to overwhelm our hospitals. Both reasonable goals. At the end of April, the new target became testing and tracing. We just have to test more people each day and each month. No one is sure what that number is supposed to be, we just know we need more testing. It’s the middle of May and now the target has become, according to one SCC Liaison Officer, “not to lose the progress we have achieved in controlling the spread.” As the target continues to change and move each time, what will the new goal be next month?

One goal that needs to be discussed and achieved is, protecting the economic health of our small business owners, entrepreneurs, workers, and the community at large. Businesspeople understand calculated risks, they make them every day, however, constantly moving the target discourages people, removes hope for a return to business, and creates other social ills no one seems to be talking about.

While some will consider this to be heartless, inconsiderate and merciless, it’s just the opposite. Continuing to make progress in protecting our residents does not have to come at the cost of completely and utterly destroying the lives of our local merchants. Those who are most vulnerable should continue to shelter-in-place. Those who are not, should be allowed to decide for themselves if they want to venture out to a store, restaurant, or other local business. Responsibly easing the shelter-in-place order is not an edict that everyone must leave their homes and stand in crowded malls and businesses.

The Gilroy Chamber of Commerce believes it’s time to get back to business. If you agree, please take the time to contact your elected officials. In this e-newsletter, you will find the e-mail addresses of our County Supervisors, the CEO of the County and the CBO Liaison. Feel free to use the verbiage provided by us, edit it as you please or send your own note.

It’s time to get back to business!

Petition the County Supervisors to Reopen

Santa Clara County Needs to Get Back to Business!

To our business community and community supporters,

The Gilroy Chamber of Commerce believes it’s time to get back to business, safely and responsibly. With no guarantees the shelter in place order will be lifted at the end of May, our businesses deserve a fighting chance to survive.

If you feel compelled to email our County Supervisors and the County Executive Officer, asking them to help make this happen, you may copy and paste the statement below, with the subject line: Let us get back to business

The email addresses for the County Supervisors and County Executive Officer are also listed below.

“I am urging you to convince the County Health Officer, Dr. Cody, to re-open the county’s economy now. According to information provided by her office, businesses located in Santa Clara County are quite capable of implementing social distancing protocols and other safety measures to protect the public. The consequences of a continued shut down will be incalculable and the effects will surely be felt for years to come, but they will continue to worsen every day our businesses are forced to stay closed. The extended shelter in place order is devastating small businesses, workers and our community. Let us get back to business.”

 

mike.wasserman@bos.sccgov.org
dave.cortese@bos.sccgov.org
supervisor.ellenberg@bos.sccgov.org
supervisor.simitian@bos.sccgov.org
cindy.chavez@bos.sccgov.org
Jeff.smith@ceo.sccgov.org
cboliaison@eoc.sccgov.org

 

Thank you for continuing to support the Gilroy Business Community during this time. Let’s get Gilroy and Santa Clara County back to business.

 

Sincerely,

Mark Turner
President/CEO
Gilroy Chamber of Commerce

HEROES Act - 12 Points For Small Business

By Mark Mansheha, The National Observer

At 1,815 pages and a $3 trillion price tag, there’s a lot to process in the HEROES Act, the federal relief bill proposed by the U.S. House this week. Let’s focus on what’s important for small-business owners.

Among the elements of the bill, which is slated for discussion and a possible vote in Congress today:

  • It extends the time period for when businesses need to spend Paycheck Protection Program loan proceeds to 24 weeks from eight weeks and extends the “covered expenses” period from June 30 to the end of this calendar year, including the time period to rehire laid-off workers.
  • It overrules an IRS decision that bars businesses from deducting expenses from their taxes if those expenses had been paid using PPP loan money.
  • It sets aside a portion of the remaining PPP authorized loan funding for businesses with 10 or fewer employees and a separate set aside for nonprofit organizations.

The Business Journals spotlights nine additional elements of the bill worth watching as it moves through the legislative process.

 

 

May 11, 2020

Gilroy Chamber Fights for Local Business

The Gilroy Chamber of Commerce with the California Chamber of Commerce and other organizations are opposing SB 1399 as this bill places enormous burdens on non-unionized employers in the clothing industry, punitive enforcement measures, and unrealistic bond requirements. SB 1399 will put employers in this industry, who are already suffering from the financial crisis of this pandemic, out of business.

There are over 30 million people seeking unemployment. Now is not the time to impose the type of burdens proposed in SB 1399 on employers, especially when it has nothing to do with addressing COVID-19 or improving the economy. We would urge the committee and author of this bill to delay consideration of this proposal until businesses have had a chance to recover from this crisis.

We are opposing SB 1399 for the following reasons:

  • Collective Bargaining Agreement Exemption Is Improper and Creates Inconsistent Standards
  • Elimination of Piece-Rate Compensation is Unnecessary and Could Harm Workers
  • Unfairly Imposes Liability for Labor Violations onto Companies Who Have No Control Over the Workforce
  • Unfairly Changes Evidentiary Standards and Limits a Company’s Right to Due Process
  • Imposes Unreasonable Bond Requirements for Non-Unionized Employers
    Creates Three Avenues of Enforcement Against Companies Which Will Increase Costs and Litigation
  • Broad Documentation Retention Requirement

The Gilroy Chamber of Commerce continues to advocate on behalf of the local business community representing the interests of business with government.

Open Letter from 151 Scholars to California Governor

“Suspend CA AB-5 Now to Hire Gig Workers During Pandemic”

(Oakland, CA)— An influential group of 151 economists and political scientists is calling for the immediate suspension of California’s AB-5, a law that was passed in 2019 to regulate the use of independent contractors in a variety of activities. The Open Letter to Suspend California AB-5 that is addressed to California Governor Gavin Newsom and all members of the California State Legislature, calls for the immediate suspension of the law, which prevents individuals from working part time in a variety of indispensable positions, especially during the coronavirus crisis.

The Open Letter is signed by such notable scholars at Nobel Laureate Vernon Smith (Chapman U.), John Taylor (Stanford U.), Lee Ohanian (U.C.L.A.), David Teece (U.C. Berkeley), and other Ph.D. economists and political scientists, each affiliated with a California college, university or think tank.

“By prohibiting the use of independent contractor drivers, health care professionals, and workers in other critical areas, AB-5 is doing substantial, and avoidable, harm to the very people who now have the fewest resources and the worst alternatives available to them,” said Williamson Evers, Ph.D., Senior Fellow at the Independent Institute and Director of the Open Letter.

AB-5 unintentionally has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals, those who would benefit most from flexibility to work around the restrictive policies, the Open Letter states.

Blocking work that is needed and impoverishing workers laid-off from other jobs may not be the intentions of AB-5, but the law is having these unintended consequences and needs to be suspended. The current situation of voluntary (and mandatory) self-isolation has created an immediate need for flexible and low-cost ways of delivering goods to people.

Hiring laws, especially for firms with more than 50 employees, mean that companies are unwilling to make long-term commitments to traditional jobs. Employment decisions hinge on the costs of distributing risk. While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency.

“It doesn’t really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place,” says Evers. “We aren’t sure what our economic needs and capacities are going to be even two months from now. But hiring someone in a traditional job, with hours and benefit requirements, is too expensive to contemplate given that employers do not know whether they will be able to fill any permanent jobs at all and, if so, when.”

A mountain of work needs to be done, deliveries made, and people stranded at home helped to receive groceries and medications. Meanwhile, furloughed Californians stand on the verge of being wiped out financially because the law prevents them from working part time in a variety of indispensable positions.

Read the entire letter and list of signatories here.

To interview Dr. Williamson Evers, please contact Robert Ade, RAde@independent.org, or 510-635-3690.

Williamson M. Evers, Ph.D., is a Senior Fellow, Director of the Center on Educational Excellence, and Assistant Editor for The Independent Review: A Journal of Political Economy at the Independent Institute.

INDEPENDENT INSTITUTE
100 Swan Way
Oakland, CA 94621-1428

The Independent Institute is a non-profit research and educational organization that promotes the power of independent thinking to boldly advance peaceful, prosperous, and free societies grounded in a commitment to human worth and dignity. For more information, visit Independent.org.

Companies Asked to Return the PPP Money

By Mark Mensheha, The National Observer

Congress’ new Select Subcommittee on the Coronavirus Crisis sent a letter to five publicly traded companies last week demanding that they return the PPP loans they received.

The letter said the money should be returned so that the funds can be used to support “truly small businesses that are struggling to survive during the coronavirus crisis.”

The five companies:

  1. Quantum Corp. (San Jose, California)
  2. EVO Transportation and Energy Services Inc. (Phoenix)
  3. Gulf Island Fabrication Inc. (Houston)
  4. MiMedxGroup Inc. (Marietta, Georgia)
  5. Universal Stainless and Alloy Products Inc. (Bridgeville, Pennsylvania)

Also:

  • A New Jersey company was approved for a PPP loan and then ruled ineligible – the same day.
  • The PPP loan-forgiveness rules keep changing. Five experts offered their input on the latest guidance from the U.S. Small Business Administration.
  • Few people can offer better perspective on what the SBA is undertaking with PPP than Franklin Sciortino, director of the agency’s Buffalo, New York, district office. Sciortino, 86, joined the SBA in 1965 and became district director in 1991. “You can’t compare this to the past,” Sciortino told Buffalo Business First. “We’ve never had anything like it.”

 

May 8, 2020

Devastated California Tourism Industry Losing $72 Billion, Report Says

Article by Kevin Smith, San Gabriel Valley Tribune

California’s tourism industry is on track to lose more than $72 billion in visitor spending this year, nearly half of what it generated in 2019, according to a new report from Tourism Economics.

Tourism Economics, a provider of economic analysis, forecasts and consulting advice, prepared the report for Visit California, the state’s nonprofit tourism and marketing organization.

The study shows the COVID-19 pandemic has erased a record 10 years of growth in visitor spending, state and local tax revenue and jobs created. It will result in 613,000 California jobs lost by the end of May, the report said, more than half the industry’s workforce that had grown at an average rate of 3.2% a year for the last decade, employing 1.2 million Californians in 2019.

Southern California economist Robert Kleinhenz said the industry’s recovery won’t be instantaneous.

“It’s a grim story,” Kleinhenz said. “When we look at our experience after 9/11, it took a few years for travel volumes to recover from that. People were hesitant to travel and gather in large meeting spaces.”

In a disruption that is virtually unprecedented, major attractions including Disneyland, Six Flags Magic Mountain and Universal Studios Hollywood are sitting idle amid warm weather that would typically attract thousands of visitors.

The current projections are particularly dismal in light of where the industry was last year. Another report by Dean Runyan Associates shows visitors spent $144.9 billion in 2019, a 3.2 percent increase over 2018.

The number of travel and tourism jobs increased by 13,000 last year to 1.2 million jobs, the report said, and travel-generated tax revenue grew for the 10th straight year, providing $12.2 billion to state and local governments. That represented a 3.4% increase over 2018.

In a posting on its website, Universal Studios Hollywood said it has extended its closure at least through May 31. Tickets bought for park visits during the closure period will be automatically extended for use through Dec. 18, management said.

Those who can’t visit during that time can apply the value of their unused tickets toward a new purchase.

“For now, we must make the health and safety of our guests and team members our top priority,” Universal said, “and we will continue to take guidance from health agencies and government officials.”

Southern California beaches, another major tourism draw, also remain largely barren.

Huntington Beach, Dana Point and various businesses throughout Orange County sought a temporary restraining order in Orange County Superior Court on Friday that would have blocked Gov. Gavin Newsom’s executive order to close their beaches. But Judge Nathan Scott rejected the injunction.

Newsom ordered a blanket closure of all parks and beaches in Orange County after images surfaced of people gathering at the beaches and ignoring social distancing guidelines. But on Monday he announced some retail businesses will be allowed to reopen with modifications as early as Friday.

Laguna Beach and San Clemente city-run beaches have been given the go-ahead to open to the public, with restrictions, based on plans they submitted to the governor’s office over the weekend.

San Clemente’s beaches opened Monday afternoon, May 4, for active use such as surfing or walking, and the pier will reopen on Tuesday, May 5.

Laguna Beach is starting with weekday morning hours for getting exercise. Neither is proposing for beachgoers to lounge around in the sun.

Los Angeles beaches remain closed, but beaches in Ventura County are open.

Caroline Beteta, president and CEO of Visit California, said the pandemic-related numbers are sobering.

“The data show just how vital tourism is to the California economy and why it must be restored when we control and ultimately overcome this deadly outbreak,” Beteta said in a statement.

When that time arrives, Visit California will be encouraging people to travel within the state, shop locally and visit local restaurants, wineries and other attractions, she said.

“California has led the nation in its response to the health crisis, and it will lead the economic comeback,” Beteta said.

Now Is Not The Time For The Crushing Tax Hikes

Now Is Not The Time For The Crushing Tax Hikes A Split Roll Would Bring

Opinion by Carolyn Cavecche, President/CEO Orange County Tax Payers Association

Back in the 1980s, the Schylling Company produced an amusing toy, Ernest the Balancing Bear.

Ernest performed a “death-defying high wire act” on a string strung high across a room. Ernest the Bear pedaled his unicycle as fast and as furious as possible across the wire trying to keep his balance and not fall off into the abyss.

Sounds a lot like California taxpayers under normal circumstances, let alone during this economic free fall brought on by the COVID-19 pandemic.

Between March 15 and April 18, 3.4 million California residents applied for jobless benefits, more than all 2019 claims combined.  Expenses are rising in Sacramento with so many people qualifying for assistance as well as increased costs for health services in response to COVID-19.

Our state’s fiscal outlook has gone from an anticipated surplus to a budget problem in the blink of an eye. The Budget Stabilization Act, passed a few years ago gives California some grace with about $18 billion sitting in our rainy day fund, but it will not last for long and soon Ernest the Bear will be in a free fall.

For decades there have been calls for California to reform our tax system and there is no time like the present to get it done.

One of our largest problems is that personal income and capital gains taxes make up the largest section of our general fund revenue, about 70 percent in all, and shockingly only 1 percent of California taxpayers pay about 50 percent of that revenue stream.

This is a very small amount of taxpayers carrying the fiscal load for the rest of the state.

This is also a volatile source of revenue that brings in more when the wealthy do well and less in economically bad times. And we have now entered challenging economic times.

The nonpartisan Legislative Analyst’s Office is predicting that tax revenues from capital gains income will be several billion dollars below what the governor’s budget anticipated.  A diverse state the size of California cannot continue to go on with boom and bust budgeting.

How bad this downturn is going to be will depend on the length and severity of the COVID-19 health crisis.  What we do know is that brick-and-mortar retail spending had already been dropping and now we add the halt to the restaurant, hospitality, retail, service and tourism sectors.

To add insult to injury there will be an initiative on the November 2020 ballot that will attempt to completely kill off any chance of a rebound to the California economy and getting our people back to work.

If you signed the initiative in front of your local store you might have been lied to and told that it would save the historic 1978 Proposition 13. Nothing could be further from the truth. It’s looking to take it apart.  And what was just a terrible idea a few months ago now threatens to completely destroy any hope of a job rebound in California and a return to a robust economy.

This initiative would raise property taxes on commercial properties across California.  Your favorite restaurant you are patiently waiting to return to, the nail and hair salon we all hope to see again before 2021, your gym, hotels, the neighborhood bar…those few who just might be able to stay in business and hire employees will all be looking at an over $11 billion tax increase that will of course be passed on to the consumer.

Now is the time for leadership to make the hard choices that will return California to its former glory.

The state where innovative businesses wanted to put down roots and provide good paying jobs and opportunities.

Now is not the time for business as usual in California, which more often than not means raising additional taxes on hard working California businesses and taxpayers until it hurts.  This time there just might not be many of us left.

Back-to-Business

May 4, 2020

Gilroy Chamber President Sends Letter to CA Senator Bill Monning

Fed Expands Main Street Lending Program

By Mark Mensheha, The National Observer

The Federal Reserve on Thursday expanded its $600 billion Main Street Lending Program. The move came after the Fed accepted more than 2,200 comments about the program since it was announced last month.

Here’s what you need to know about the changes.

Paycheck Protection Program lending continues as well. The program’s forgiveness clause continues to be a focal point, and there’s an argument to be made for why a redo of that clause could give businesses greater protection. But as PPP continues under its existing parameters:

  • Here’s advice from bankers, accountants, lawyers and entrepreneurs about what business owners should do to ensure as much of the loan is forgiven as possible. Recipients are encouraged to make sure a PPP loan doesn’t conflict with any other outstanding loan.
  • Still looking to find your way into the program? Here’s how three PPP recipients took three different roads to obtain funding.
  • And, if you’ve applied but haven’t heard back yet, here’s what you can do.

Planning and Permitting with the City

In conjunction with the recently extended and revised Shelter in Place order by the County, the City is performing planning and permitting services remotely and through electronic means, such as phone and email.

If you need to schedule an inspection or have any questions regarding planning and permitting services, please visit our website at www.cityofgilroy.org/167/Community-Development or give us a call at 408-846-0451.

Building permit applications may be submitted electronically by email at PlanSubmittal@cityofgilroy.org.

Building Permit Application, handouts, and other forms are located at http://www.cityofgilroy.org/214/Building-Forms-Handouts-and-Policies.

Planning application submittals may be submitted at planning@cityofgilroy.org
After our staff reviews the application materials, an email will be sent back with instructions for payment of applicable fees.

Some Optimism on the Economy

By Joel Fox, Editor and Co-Publisher of Fox and Hounds Daily

On the heels of reports on how hard the United States economy was hit in the first quarter of the year along with new and greater unemployment numbers and predictions that the next quarter will also be produce depressing statistics, I thought on this Friday it would be good to see there are new optimistic projections on the state and national economies from different economic experts.

While California economist Christopher Thornberg and his Beacon Economics team argued in a new report that the structure is in place for a V-shaped rebound of the economy, former Californian and well-known economist Arthur Laffer teamed up with Stephen Moore to produce a paper that also boasts America’s opportunity for a rebound. Laffer and Moore went further suggesting that California is one of a handful of states that must come back to uplift the entire U.S. economy.

To be sure, both economic papers point out the challenges of making predictions on the economy at this stage. Similarly, both expect a rough second quarter for the U.S. economy. But then they see the potential for a brighter future.

Thornberg and Beacon Economics said most of the fiscal prognostications are grim because there is very little data to relay on, while we are living through an extraordinary time of early school closures and empty streets. But the report also argues that what we are experiencing now is nothing like the Great Recession of more than a decade ago. That is because, “The vast majority of people currently applying for unemployment are being laid off from profitable, sustainable businesses that have been shuttered temporarily as a result of public health mandates.”

Because the United States is less dependent on global trade and supply chains than other developed countries and because the service economy is not dependent on inventory buildup, the Beacon economists envision a pent-up demand from the greater portion of the economy with money to spend post-crisis bringing the country back relatively rapidly in a V-shaped effort—meaning the economy dropped precipitously with the onset of the pandemic and it will zoom ahead once the crisis is controlled to a satisfactory degree.

One unknown Thornberg raises is whether post-crisis consumers behavior will change dramatically. “Will consumers stop going to ballgames and music festivals?” the report asks. Yet, Thornberg and Beacon made it clear what they think will happen by titling their report, The Post Covid-19 Economy: A Case for the “V.”

Meanwhile, the Laffer-Moore study released at the same time concluded that “the right policy prescriptions and states opening up for business quickly, we will see a very sharp contraction this summer with high unemployment followed by a strong recovery that will arrive within six months.”

Like Thornberg, Laffer and Moore have caveats to watch for if the economy is to make a swift comeback. They warn that a bail out of the states would have a large negative effect on the economy. They also see a possible second shutdown of the economy as having a huge negative effect if it comes to pass. But they still see the possibility of a recovery before the end of the year.

And, an economically healthy California opened for business would be a cornerstone of the national recovery.

Laffer and Moore concluded there report this way: “A strong national economic recovery will be inhibited if California, Illinois, Michigan and New York keep their economies shuttered into the summer months. These four states alone account for about one-third of the national output. ALL states would benefit mightily if California, Illinois, Michigan and New York open sooner rather than later.”

Different economists with varying philosophies both see a light at the end of the dark, economic tunnel.

Governor Newsom Announces Four Phases to Reopen California Business, Schools

Los Angeles Times

Gov. Gavin Newsom, on April 28, laid out a vision of how California’s businesses, schools, and childcare facilities may be allowed to slowly reopen amid the ongoing Coronavirus pandemic.

The state plans to reopen those sectors in four stages, as described by Department of Public Health Director Dr. Sonia Angell:

Stage 1: Everyone is either staying at home or a member of the essential workforce. This is the stage we are in now and will stay in until a modification to the statewide stay-at-home order.

 

Stage 2: Reopening lower risk workplaces, including:

  • Non-essential manufacturing (toys, furniture, clothing, etc.)
  • Schools
  • Childcare facilities
  • Retail businesses for curbside pick-up
  • Offices where working remotely isn’t possible but can be modified to make the environment safer for employees

 

Stage 3: Reopening higher risk workplaces, which require close proximity to other people, including:

  • Hair salons
  • Nail salons
  • Gyms
  • Movie theaters
  • Sporting events without live audiences
  • In-person religious services (churches and weddings)

 

Stage 4: Ending the stay-at-home order, which would allow for the reopening of:

  • Concert venues
  • Convention centers
  • Sporting events with live audiences

 

On the question of when we may be able to move from the first stage to the second, Newsom said he believes we are “weeks, not months away.” Stage 3 and 4, however, are “months, not weeks” in the future.

Moving into Stage 2 will require a modification of the statewide stay-at-home order, but once we enter the second stage, local governments will have more options. At that point, counties will be allowed to relax restrictions more quickly or more slowly, based on conditions at the local level.

Newsom acknowledged that as schools remain closed, there is a “learning loss” for California’s students. To make up for some of that lost time, the governor said the state is considering starting the 2020-2021 school year earlier. Schools may reopen as early as late July or early August, the governor said, though no decision has been made yet.

In order to work toward Stage 2 of reopening, Dr. Angell said the state is continuing to monitor hospitalization rates to ensure they stay stable. In the meantime, they also need to ensure there’s an adequate social safety net that allows workers to stay home if they’re feeling sick. Businesses also need to have plans to make workplaces safer for employees when they are allowed to return. Even during Stage 2, people should continue to work remotely if possible, continue physical distancing, and wear face coverings when appropriate.

  • In order to move into Stage 4, where stay-at-home restrictions are lifted and people will be allowed to come together in large numbers, therapeutics will need to be in place, Dr. Angell said.
  • “This is going to be a while, but there are ways we can modify the way we move around in our environment that will make it more possible (to reopen),” she said.
  • The governor says the state is continuing to monitor six key criteria on the path to reopening:
  • Expanding testing and doing contact tracing for those who test positive.
  • Being able to protect California’s most vulnerable populations, including seniors, homeless individuals, and those with compromised immunity.
  • Ensuring medical facilities are equipped to handle potential surges.
  • Working with research hospitals and other research partners to pursue therapies for the virus.
  • Making sure businesses, schools, and other public spaces can continue physical distancing.
  • Being able to return to more strict measures, as needed.

 

Last week, the governor did a deep dive into the state’s progress on the first criteria: testing and contact tracing.

“Politics will not drive our decision making. Protests will not drive our decision making. Political pressure will not drive our decision making,” Gov. Newsom said. “The science, data, and public health will drive our decision making.”

May 1, 2020

Average PPP Loan Is Cut In Half

By Mark Mensheha, The Business Journals – The National Observer

An emphasis on “small” is defining Round Two of the U.S. Small Business Administration’s Paycheck Protection Program.

The average loan size for this week’s PPP restart is smaller than it was for the initial funding round — about $94,000 per approved loan compared to $206,000. There also are signs that smaller, community banks are getting more access this time. Lenders with less than $10 billion in assets had signed off on more than 70% of approved loans as of earlier this week. That was before the SBA said it would “only accept loans from lending institutions with asset sizes less than $1 billion” for an 8-hour block to close the day yesterday. It might not be the only such lockout, either.

“SBA and Treasury will evaluate whether to create a similar reserved time again in the future,” the agencies said in an email obtained by the Philadelphia Business Journal.

What’s it all mean?

“[It] means independent contractors, self-employed individuals are now filling the system during the second round, and they are going to be much smaller dollars than most of the first-round recipients,” said Peter Gwaltney, CEO of the North Carolina Bankers Association, speaking to the Triangle Business Journal.

That’s not to say everyone is happy. The PPP pool is expected to run dry again perhaps as soon as the weekend. Small-business advocates told The Business Journals that rather than Congress putting more money into the same program, different needs for small businesses should be considered.

“Small businesses need direct support to weather this storm, especially beyond the eight-week timeline of the PPP loan [forgiveness],” said Main Street Alliance Executive Director Amanda Ballantyne. “We must now turn our attention from triage to programs that will put small businesses on a path to economic recovery.”

Unemployment Insurance Available for Business Owners, Self-Employed

By Mark Anderson, Staff Writer, Sacramento Business Journal

The California Employment Development Department announced Tuesday that it’s launched its program to offer financial assistance to business owners, self-employed people and independent contractors affected by Covid-19 closures who don’t have access to traditional unemployment insurance.

The program is funded by the federal government under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the $2 trillion economic relief package signed into law last month.

“We know there are a lot of workers in the state who are in business for themselves and have been greatly struggling through this historic pandemic,” said EDD director Sharon Hilliard, in a news release. “We have worked to get this new program in place quickly to support working Californians, the self-employed, their families and their communities.”

The new federal Pandemic Unemployment Assistance (PUA) program also offers funds to people with a limited work history.

People can apply on the EDD website and look for the EDD’s Pandemic Unemployment Assistance program.

Applicants need to answer questions about employment history and earnings to be eligible. The department will determine whether claims should be made under the PUA or traditional unemployment.

Eligible claims can get an initial payment of $167 per week dating back to the first week of February, depending when they became unemployed due to the pandemic.

The rate increases for benefits between March 29 and the end of July, and the EDD will automatically add an extra $600 in federal stimulus funds per week to the payments.

People who are already receiving California unemployment insurance benefits cannot qualify for PUA benefits.

What to Expect as 12 States Begin to Reopen After COVID-19 Shutdown

By Fred Lucas, White House Correspondent, The Daily Signal

Come Friday in Texas, the nation’s second-largest economy, businesses such as restaurants and retail stores will be open again, but at a 25% occupancy rate. After that, public health officials will reevaluate the data and decide whether to allow a 50% occupancy rate.

The Lone Star State is among nine states where governors’ stay-at-home orders expire at the end of Thursday, allowing for a gradual reopening of their economies, according to Pew Research Center’s Stateline, which monitors state governments.

“If we go back to work and there is no increase [in COVID-19 cases], people could become complacent about social distancing and think it’s not dangerous,” Amy Anderson, a registered nurse in Texas, told The Daily Signal. “It’s important to maintain our vigilance.”

Anderson noted that business owners likely will continue to be responsible, since they face a fine of up to $1,000 and even jail time for not complying with government restrictions. Plus, most businesses are licensed by state and local governments.

Various states have different rules for reentry, but most are in line with the guidance by the White House coronavirus task force, said Anderson, co-founder of the Global Nurse Consultants Alliance and an assistant professor at the School of Nursing and School of Medicine at Texas Christian University.

There’s no real economic alternative but to reopen soon, contends Alfredo Ortiz, president of the Job Creators Network, a business group.

“I don’t think we have a real choice but to open the doors up. My concern is demand won’t be high enough,” Ortiz told The Daily Signal in a phone interview. “If we wait for the unattainable goal of zero cases of COVID-19, the economy would be closed for months and you would see an increase in depressions and suicides.”

The other states besides Texas where stay-at-home orders were set to expire Thursday are Alabama, Arizona, Idaho, Maine, Nevada, Tennessee, West Virginia, and Florida, where some beaches already have reopened.

On Friday, stay-at-home orders in Indiana, Ohio, and Utah are set to expire, meaning some businesses will reopen Saturday.

“In Florida, it hit the Miami-Dade County area worst,” Dr. Lee Gross, who practices family medicine in North Port, Florida, said of COVID-19, the disease caused by the new coronavirus.

“In general, in population centers now, we are seeing a decline, while in rural areas, we are seeing a steady increase,” Gross, also president of the advocacy group Docs 4 Patient Care, said.

“Here in Charlotte County, the beaches are opened and people are still standing 6 feet apart, but they seem packed,” Gross added during a phone interview with The Daily Signal.

Meanwhile, in Georgia and Colorado, Govs. Brian Kemp and Jared Polis, respectively, moved last week to reopen their economies, including allowing hair salons and tattoo parlors to resume business, a controversial move.

“Salons could be safe if there is a determined amount of people allowed in and a way to be responsible,” Gross said. “Outdoor venues are generally safer than indoor venues. But, you don’t want kids climbing around on monkey bars.”

Colorado has had 122.6 deaths per million from COVID-19, while Georgia has had 93.6 deaths per million, according to the RealClearPolitics coronavirus tracker. In raw numbers, the larger Georgia had 994 deaths, while Colorado had 770.

President Donald Trump criticized Kemp, a fellow Republican, for his decision to reopen without following the White House guidelines. However, Trump did not criticize Polis, a Democrat.

“Government guidance is just that, guidance. It’s not a proclamation or law,” Gross said. “States should take guidance into consideration.”

Governors generally are leaving discretion to local communities, said Dr. Kevin Pham, a medical doctor and contributor to The Daily Signal.

“If states are less draconian and trust people, they will likely get better cooperation longer, rather than revolt in protest,” Pham said. “It is a risk to reopen, but if you don’t reopen, there are other risks. Life and livelihood are connected to one another.”

Pham also looked at the realistic outcomes from reopening, positive and negative.

“The worst-case scenario is a huge spike in [COVID-19] cases and hospitalizations and all the gains that were made from the mitigation efforts will be wiped out, the need for personal protective equipment will skyrocket again, and we’ll have crisis care that will require more ventilators,” Pham said.

“The best-case scenario is that we will have a gradual and deliberate reopening with continued social distancing, and we’ll see a lower spread rate,” Pham added.

Other states that are ready to drop their stay-at-home orders logged varying rates of death from COVID-19.

Alabama had 49.4 deaths per million; Arizona had 37.8 deaths per million; Florida, 54.5; Idaho, 42.4; Maine, 37.9; Tennessee, 26.9; and West Virginia, 20.7.

Of the states slated to begin reopening gradually after Friday, Indiana had 138.4 deaths per million; Ohio had 68.4; and Utah, 14, according to the RealClearPolitics tracker.

Next week, the states of Kansas, Minnesota, Missouri, North Carolina, Pennsylvania, and Rhode Island will begin to reopen, according to Pew’s Stateline.

The state with the largest number of deaths and highest death rate was New York, where 22,806 have died, a rate of 1,175.4 per million.

The Empire State’s stay-at-home order is set to expire May 15. That’s the same day as Delaware, Louisiana, Michigan, New Mexico, Vermont, and the District of Columbia are set to drop their stay-at-home orders.

In Connecticut, with the third-highest death rate in the nation at 564.3 per million, the stay-at-home order is set to expire May 20. Illinois and Hawaii are slated to open May 30 and 31, respectively.

As of now, Virginia will reopen June 10. In seven other states, according to Pew, no dates are set for stay-at-home orders to expire.

Another eight states had no stay-at-home orders: Arkansas, Iowa, Nebraska, North Dakota, South Dakota, Oklahoma, Utah, and Wyoming. In most of these cases, the states issued guidance and local governments and businesses were free to take action.