A short recession is still a recession + Gas tax gives and takes away + Lawsuit over protest ban

Happy Tuesday! Thank you as always for reading.

IT’LL GET WORSE BEFORE IT GETS BETTER

Things are going to be really, really bad for a while, and then they’ll get better.

That’s the gist of what Jerry Nickelseburg, professor of economics and director of UCLA Anderson Forecast said of California’s pandemic-induced recession during Monday’s Assembly coronavirus budget subcommittee hearing.

The “heroic” assumptions, Nickelsburg explained, are that the economy will reopen by summer once the spread of COVID-19 slows to a manageable rate. This rosier outlook also depends on an end to the coronavirus this year, or an available vaccine by next year should the ‘rona return.

What Nickelsburg’s team anticipates is a 10 percent decline in national GDP growth and a 12 percent unemployment rate. In California, given the disproportionate number of workers in the affected industries, that rate is projected to hit by the end of the fourth quarter 16.5 percent.

And then?

“We will begin a recovery,” Nickelsburg said, “which we believe will be more rapid than the last recession. But it’s not going to be an extraordinarily rapid recovery. It will take about 18 months to return to 2019 employment levels.”

So is that the kind of good news we all latch on to these days? Well, yeah, they are.

The light at the end of the tunnel includes some recovery.

Certain sectors will bounce back quickly, depending on consumer interest, Nickelsburg said. Others will struggle, particularly in the retail, leisure and hospitality industries. Businesses in those sectors might reopen for a bit, but are then likely to collapse.

“They will try to open up...and then they will end up in bankruptcy and closing,” Nickelsburg said.

Another noteworthy nugget -- Don’t expect international tourism to surge back to California to pre-coronavirus rates until at least 2022, though domestic travel will increase as restrictions lift and people feel the itch to get the heck out of their houses.

Other notes of caution — Assemblyman Jim Wood, D-Santa Rosa, raised frustration and concern on Monday about the stockpile of personal protective gear for workers in businesses wanting soon to reopen.

Wood probed Gov. Gavin Newsom’s administration during the hearing about the state’s plan to acquire enough protective equipment to safely reopen the economy.

“You talk about it as a problem. I consider it a crisis quite frankly,” Wood said.

If you tell a business — especially a medical facility — it can open, he added, but don’t provide PPE, that’s a “crisis on top of a crisis.”

CALIFORNIANS APPROVED A GAS TAX, AND THEN STOPPED DRIVING

California voters two years ago emphatically endorsed a plan to speed highway and transportation projects when they supported at the ballot box a package of gas taxes and vehicles fees.

But the cororonavirus outbreak looks likely to jeopardize those plans.

Traffic volume on state highways has plunged dramatically in California since Newsom issued a stay-at-home order last month. As a result, Californians are buying much less gas and paying less tax. Suddenly the state’s ambitious program to improve those roads faces an uncertain future.

The anticipated plunge in tax revenue is roiling transportation projects around the country. Congress and the White House are being pushed hard by the state transportation officials’ Washington-based group to provide states with $49.95 billion in federal aid.

Lawmakers are starting to discuss a new economic aid package — a goal with an endgame still weeks away — but transportation officials are hoping that the funds they’re requesting will be included.

The nation’s plight is being echoed in California, where Newsom’s administration is revising his state budget proposal to account for suddenly plummeting tax revenue.

“This could cause some problems. There could be some delays if regions across the state don’t take advantage of quieter streets and lighter public transit schedules to work on improvement projects,” said Sen. Jim Beall, D-San Jose, who leads the Senate’s transportation committee.

Beall says things could be worse. Read more on how transportation advocates are making a case to Congress for more money in this story by McClatchy’s David Lightman.

NEWSOM AND CHP FACE LAWSUIT

Via Sam Stanton...

Days after the California Highway Patrol banned demonstrations at the state Capitol and other state properties because of coronavirus fears, a federal civil rights lawsuit has been filed in Sacramento accusing Newsom and the CHP of a “gross abuse of their power.”

The suit, filed jointly by an employee of a Sacramento gun store and a Republican congressional candidate, claims their applications for permits to hold demonstrations at the Capitol were both rejected by the CHP after Newsom ordered the agency to halt issuing such permits following a boisterous April 20 demonstration against the governor’s stay-at-home order.

Ron Givens, the chief firearms instructor for the Sacramento Gun Club, says in the suit that California Department of Justice background checks for gun buyers that must be completed within 30 days are being delayed “under the guise of a public health emergency” and that he wanted to hold a protest over the issue.

“The CADOJ traditionally completes these within 10 days,” the suit says. “During the COVID-19 outbreak, many customers purchased firearms from Given’s place of employment, The Sacramento Gun Club.

“Many of the firearm purchases by customers were motivated by heightened need for personal safety during a pandemic and concerns that county sheriffs, such as the Los Angeles County Sheriff, might shut down gun stores during the pandemic.”

Newsom has said decisions on whether gun stores remain open during the COVID-19 emergency are a matter for local sheriff’s officials, a stance that prompted a lawsuit from the National Rifle Association.

Givens said in the suit that he submitted a permit application last Wednesday for a protest.

The CHP banned such protests last week after hundreds of demonstrators converged on the Capitol to demand Newsom reopen the state’s businesses and schools. Most were not wearing protective masks or gloves, and gathered close together to listen to speeches and watch a convoy of vehicles circling the Capitol grounds.

Read more here.

QUOTE OF THE DAY

“The reality is, we are just a few weeks away, not months away, from making measurable and meaningful changes to our stay-at-home order.”

- Gov. Gavin Newsom, offering some hope during his daily coronavirus press conference.

Best of the Bee:

• Gavin Newsom rebukes California beach-goers: ‘This virus doesn’t take the weekend off’, via Andrew Sheeler

• ’They hate me:’ How Devin Nunes taps into Trump outrage to raise millions for his campaign, via Kate Irby

• Sacramento County’s public health program designed to ward off disease outbreaks has seen its funding dwindle for years, even as other departments saw their budgets increase and warnings of a looming pandemic intensified, a review of budget documents, meeting minutes and interviews with current and former officials found, via Jason Pohl and Alexandra Yoon-Hendricks.