Part 7: Government’s Immense Powers during Emergencies

Part of our ‘Thinking About Tomorrow Today’ series

As the coronavirus began to impact the country, government leaders at all levels declared “states of emergency.”  That meant that this crisis was extraordinary, triggering “emergency powers” that necessitated governments taking extraordinary actions.

We clearly saw this when “stay at home” orders were issued and when businesses were told to shut, unless they were deemed an “essential service.”  This “essential service” designation seemed relatively subjective and varied from state to state.  Michigan’s governor went so far as to proclaim that consumers, who shopped at essential stores, could only buy “essential goods.”  Products like baby car seats, home paint, and grass seed were restricted from being available for sale, as the Governor declared them “non-essential.”

Governments’ emergency powers have risen to a height that most had never seen before.

Laws that were passed by legislatures were paused at the state and local level.  Regulations and requirements imposed by government agencies were just changed or suspended by those agencies.  Could anyone truly have imagined that the IRS would unilaterally, without congressional approval or public debate, change the April 15 tax filing deadline to July 15?  I am happy they did, but this was done with a single executive action, without hesitation.

State laws, right here in California, were suspended by Governor Gavin Newsom’s executive orders.  These orders changed rules that govern everything from health care agencies to grocery bags to sales tax filings to alcohol usage, plus much more, without any legislative action.

Even the insurance commissioner of California, Ricardo Lara, ordered auto insurance companies to refund premium payments made by customers for two months, based on the premise that car usage and in turn, auto accidents were down.

These executive actions just scratch the surface on how executive powers have been flexed to respond to a crisis.

But this is not the first time California has declared a state of emergency.  For example, last year Governor Newsom declared a couple states of emergency in areas that were ravaged by wildfires.  During that time, the Governor and his administration used emergency powers to help individuals and businesses that were affected.

Other governors of California have also used such powers.  Governor Pete Wilson declared a state of emergency in 1994 after the Northridge earthquake.  In that emergency, the Governor and his administration used executive orders to streamline Caltrans contracting practices and set aside various other statutory and regulatory requirements to speed up the rebuilding of major roadways.  The Santa Monica Freeway re-opened in three months, dramatically shortening the construction period that might otherwise have taken two years.

During the energy crisis in the early 2000s, Governor Gray Davis declared a state of emergency and waived many regulations to expedite the construction of additional electrical generation facilities.  He said this week in the Sacramento Bee, “I used the (emergency) powers to not only license, but put online and operate 32 (new power) plants.”

So as Governor Newsom and other government leaders look to “re-open” the California economy, they should consider how best to use these emergency powers to spur our economy out of its current coma.

Just as emergency powers have been used to keep Californians safe in response to the public health emergency over these past couple months, we are now facing an unprecedented and urgent economic emergency.  Shouldn’t the powers of government be used just as aggressively to address this crisis?

Could Governor Newsom follow Governors Wilson’s and Davis’ lead by stripping away regulations, so that infrastructure can be primed and ready to be built over the next few months, putting thousands of Californians quickly back to work?

Might the Governor and the Insurance Commissioner of California restrict claims for workers compensation or business liability from those believing that they contracted the coronavirus on the job or by patronizing a reopened business for the next six months?  This would go a long way toward making businesses feel more comfortable opening their doors.

The Governor could also set aside restrictions that force cities or school districts to use certain state or local funding for special purposes.  Local governments are facing an unprecedented losses of tax revenues directly resulting from the quarantine, so letting various restricted funds go toward current priorities might provide some local government financial relief.

Other waivers could include increasing the six-child cap for many day care facilities, to  help parents get back to work, or suspending the requirement for barbers, nail salons, and many other businesses to get state permits in hopes of encouraging more entrepreneurial folks to start up a small business as the economy recovers.

Further, local governments could do what we did in Anaheim in the early 2000s, by providing a ‘Home Improvement Holiday,’ waiving permit fees for home improvements, or defer development fees on new construction until after construction is completed, in hopes of spurring economic investment in our cities and neighborhoods.

Emergency powers that we see government use during this crisis can be scary.  But now is the time to use those immense powers positively to address this economic emergency in a way that re-energizes the entrepreneurial spirit that makes this state and country so unique.


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