California Coronavirus Costs Expected to Reach $7 Billion

A social-distancing sign is posted at the North Hollywood Farmer’s Market in Los Angeles on April 4, 2020. (AP Photo/Richard Vogel)

(CN) — In a letter sent to state lawmakers Friday, California Governor Gavin Newsom’s budget adviser said the Golden State will need to spend a minimum of $7 billion to fund the effort to protect the public from the coronavirus pandemic.

The state, which has already allocated $1 billion to fight the viral outbreak, is expected to spend an additional $6 billion in projected costs in 2020, according to Keely Martin Bosler, director of the state’s department of finance.

“This funding is being used to secure personal protective equipment and critical medical supplies to expand the surge capacity of hospitals and medical facilities, as well as to support the state’s efforts to protect public health and safety and reduce the spread of Covid-19,” Bosler wrote.

Bosler said the state expects a majority of the expenditures to be reimbursed by the federal government. The Federal Emergency Management Agency covers 75% of most disaster-related expenditures, including equipment purchases, and temporary housing and medical facilities.

It will be up to the Legislature, which is expected to reconvene in early May, to approve of the increased funding.

Bosler also warned lawmakers that unemployment numbers could “peak at a level higher than the Great Recession.” On Thursday, the California Employment Development Department said it has processed almost one million claims since March 1.

Newsom announced Thursday that those receiving unemployment benefits will receive an additional $600 a week starting on Sunday. The money comes from the federal Pandemic Unemployment Assistance program passed by Congress as part of a coronavirus relief package.

While California has $21 billion in its budget reserves, Bosler said expenditures used to fight the coronavirus will modify Newsom’s initial budget submitted in January.

“Resource constraints will likely force a further prioritization and reduction of expenditures,” she wrote.

Bosler said the state is projected to have approximately $8.7 billion in available cash and unused internal borrowable resources by the end of June, the deadline for the governor to submit a revised budget to lawmakers.

Last month, Gov. Newsom said his administration had already begun to revise the budget. On Wednesday, he sent a letter to House Speaker Nancy Pelosi, asking Congress to appropriate $1 trillion in aid to states and local governments.

%d bloggers like this: