SACRAMENTO, Calif. (AP) — Taxpayers will pay restaurants to make meals for millions of California’s seniors during the coronavirus pandemic, an initiative that could pump billions of dollars into a devastated industry while generating sales tax collections for cash-strapped local governments, Gov. Gavin Newsom announced Friday.
Watch the governor’s remarks in the player above.
California has about 5.7 million people 65 and older and it’s not known precisely how many will be eligible, though Newsom said he expects it will be millions. To qualify, seniors must earn below 600% of the federal poverty level, which is $74,940 for an individual and $154,500 for a family of four. They also must have either been exposed to the virus, have a high risk for exposure or a compromised immune system.
A qualifying senior will get up to $66 per day for three meals at local restaurants that meet certain criteria. If 2 million people sign up and get all three meals a day, the price tag would be about $4 billion per month.
The federal government will pay for 75% of the cost. Local governments will pay for the rest. But the state government will cover 75% of the cost to local governments.
“This will allow for the ability for restaurants to start rehiring people or keep people currently employed,” Newsom said. “We will provide an unlimited number of meals.”
Local governments will choose which restaurants will make the food and get the money, decisions Newsom indicated would be based partly on nutrition. The program will favor “independent restaurants” and produce from local farms.
“We really want to focus our values throughout the state of California to get a lot of independent restaurants up and running again as well, have a diversity of options and make sure that what we are sending to our seniors is low sodium and not high-fructose drinks and sugary drinks and the like,” Newsom said.
California has been under a mandatory stay-at-home order since March 19 and restaurants aren’t allowed to seat customers. Many restaurants have tried to shift their business to take-out and delivery, with varying levels of success.
California restaurants have laid off 70% of their workers since March, or about 1 million people, according to a survey by the National Restaurant Association.
Likewise, sales tax collections for local governments have dried up because so many retail businesses are closed and restaurants and many other essential businesses that are open are doing only a portion of their normal business. The League of California Cities said they estimate local governments will lose $6.7 billion over the next two years because of the coronavirus.
Jon Coupal, president of the Howard Jarvis Taxpayers Association that favors lower taxes and smaller government, said he supports Newsom’s initiative provided it includes necessary oversight to guard against abuse.
“Assuming that they are careful with the way that the money is spent, and making sure that nobody is getting wealthy or that people are receiving the meals they could have afforded to easily purchase themselves, our sensibilities are not insulted by that,” he said. “This is a lifeline to an important segment of the economy.”
California has more than about 40,000 confirmed virus cases and more than 1,500 deaths, according to data compiled by Johns Hopkins University. The number of infections is likely much higher because many have not been tested, and studies suggest people can be infected without feeling sick.
Newsom has said hospitalizations and patients in intensive care units are key statistics for deciding when to loosen stay-at-home orders. Both numbers have been essentially flat for much of the week.
For most people, the virus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death.
That’s why Newsom said the stay-at-home orders will likely last longer for people 65 and older.
“Our seniors will continue to be a focus of our energies,” Newsom said.