California’s government faces a $54.3-billion budget deficit through next summer according to an analysis released Thursday by advisors to Gov. Gavin Newsom, the deepest projected fiscal hole in state history.

The estimate accounts for both an alarming erosion of tax revenues and a growing need for health and human services programs. While it measures the gap between revenues and expenditures based on projections made by Newsom in January rather than existing funds, the assessment nonetheless reflects a record-shattering collapse of the state’s economy, one created in just a matter of weeks by the fast-moving COVID-19 pandemic.

“The COVID-19 pandemic has caused enormous hardship for families, businesses and governments across the world, the United States and California,” states the analysis released by the California Department of Finance. “It has endangered health, stressed the healthcare system, and caused devastating losses in family and business income.”

Newsom’s budget team forecasts a $41.2-billion drop in tax revenues compared to their estimates from just four months ago. Most of that — $32.2 billion — would appear in the fiscal year that begins in July. Current year tax revenues, according to the report, are expected to miss the mark by $9.7 billion, even though most of the state’s budget year had already passed by the time the virus became an immediate concern in March.

Expenses are also projected to skyrocket. The fiscal report released Thursday assumes some $13 billion in higher state costs due to the pandemic, with a combined $7 billion in higher-than-expected caseloads for programs such as Medi-Cal, which provides free healthcare, and CalWorks, the state’s welfare assistance program. As much as $6 billion in expenses are assumed to be the result of the state’s COVID-19 response.

The decision to release the dire estimate early — Newsom won’t present his revised state spending plan to the Legislature for another week — was likely prompted by a desire to calibrate the expectations of lawmakers and interest groups about what lies ahead. Lawmakers and a variety of state Capitol insiders were briefed about the projection on Wednesday, and many who reviewed the deficit projection predicted a bleak road ahead.

“It’s a really frightening number,” said Kevin Gordon, a veteran education lobbyist.

The impact on K-12 education funding could be especially severe. Schools receive roughly 40% of the state’s general fund revenues and, under a series of complicated constitutional formulas, could see their minimum funding cut by more than $18 billion under the Newsom administration analysis.

“The cuts allowed would eviscerate school budgets,” Gordon said.

And the reductions could come as state officials are asking schools to do more to help children, especially those from low-income families, when it comes to distance learning and provided meals.

In January, with the economy still expanding, Newsom proposed a $222.2-billion budget plan that projected upticks in spending on K-12 schools and healthcare programs. But that plan, introduced less than eight weeks before the governor declared a state of emergency to combat the coronavirus crisis, assumed a steady growth in personal income of 4% a year and continued low unemployment.

Those expectations have vanished. The state has processed more than 4.2 million unemployment claims since mid-March, nearly equivalent to all of the jobs in Los Angeles County. The Newsom administration estimates almost 478,000 jobless claims were filed in just the past week. The state received approval this week for an $8-billion loan from the federal government to cover the rising cost of those benefits.

The projected $54.3-billion shortfall is the largest such estimate since the $40-billion deficit predicted by then-Gov. Arnold Schwarzenegger during the Great Recession in January 2009. In 2011, then-Gov. Jerry Brown said the state stared down a $27-billion fiscal hole. The Newsom analysis notes that projected deficits of the past may have been smaller from a total dollar amount, but also constituted a smaller percentage of the general fund than what lawmakers face this year.

A steady uptick in jobs and tax revenues erased the red ink of the past, with some of the money set aside in cash reserves. California voters boosted the maximum size of deposits in the state’s “rainy day” fund in 2014.

The efforts by state lawmakers, led by Newsom and Brown, to sock cash into that reserve fund could help soften the blow. The independent Legislative Analyst’s Office estimated last month that the state’s cash reserves total around $17.5 billion — money that could provide a cushion, but only under a series of strict conditions.

Lawmakers are also hoping that the crushing weight of a historic deficit will be alleviated by the federal government. Many of California’s emergency coronavirus expenses could be reimbursed by the Federal Emergency Management Agency. In addition, the stimulus effort signed into law by President Trump provided $9.5 billion in relief to the state budget, with an additional $5.8 billion sent directly to California’s largest local governments.

On Tuesday, Newsom said he hoped federal officials would do much more.

“I imagine we would be front and center in that consideration,” he said of additional federal help.

Advisors to Gov. Gavin Newsom agreed to pay Chinese electric car manufacturer BYD $3.30 for each mask the company made under a coronavirus response contract totaling almost $1 billion that has been kept under seal for the past month.

But invoices, emails and other documents obtained by The Times suggest the deal was still in the process of being vetted by state officials when Newsom suggested it was complete during a national TV broadcast on April 7.

The price per mask was revealed in a document provided by the California state treasurer’s office, which was responsible for the release of the funds. However, it lists only the sale of coveted N95 masks, those considered to provide the most protection, and not the cost of traditional surgical masks BYD has also sold to the state.

BYD has so far shipped only the less expensive surgical masks, with the first of them arriving late last month.

The Governor’s Office of Emergency Services refused Monday to provide the contract, insisting in a letter to The Times that the document is exempt from disclosure under the California Public Records Act. Members of the Legislature have also been stymied in their attempts to see the contract, though Newsom administration officials promised they would provide access once the deliveries of masks are complete.

Newsom abruptly shifted course on Wednesday, promising that the BYD contract will soon be released and blaming government attorneys for why that hasn’t happened sooner.

“A lot of these contracts haven’t been made public as quickly as we would like them to be,” he said during a midday briefing streamed online. “And you, the public, deserve that information. And you’ll be getting that very, very soon.”

Documents obtained from the office of State Treasurer Fiona Ma through a records request include an April 7 invoice from Global Healthcare Product Solutions, a subsidiary of BYD, for “N95 face masks” with a per-unit price of $3.30. It stipulates that the state will pay half of the total cost of the deal — $495 million — in advance of the first 150 million masks being delivered. In all, the invoice notes 300 million N95 masks will be delivered by the time the contract ends.

“All sales are FINAL. We do not accept any returns or exchanges,” the invoice says.

The cost of personal protective equipment during the early weeks of the global pandemic has fluctuated wildly, with healthcare professionals and government officials scrambling to find the gear while ensuring those supplies aren’t pilfered by outside actors. States have also complained of supplies being commandeered by the federal government. Newsom administration officials have told lawmakers those kinds of fears are why they have kept the terms of the contract confidential.

Newsom said Wednesday he welcomed public scrutiny of the costs.

“We negotiated a pretty good price in the middle of all this,” he said, noting inflated prices being paid by others in the early weeks of the crisis. “I hope you’ll consider those price points that we were able to negotiate, up against where the market was.”

Frank Girardot, a spokesman for BYD, said the per-mask price includes all taxes and duty fees plus the freight costs for air delivery. He said once those costs are factored in, the pre-shipping cost per mask to the state was $2.88.

“Our cost is fair,” Girardot said Wednesday. “There is nobody that can make this quantity, this fast.”

Sergio Fernandez de Cordova, the chairman of a New York media nonprofit group that is working with the government consulting firm Raymond Associates to secure better mask deals for government agencies, estimated the $3.30-per-mask price could be some 30 cents per mask higher than it’s costing the company to manufacture and ship overseas.

He said with the amount of money California can muster, the state could have propped up its own factories in the state, employed Californians out of work and made large quantities of similar masks for “easily under a dollar.”

“The state could have launched 190 new companies around this,” Fernandez de Cordova said. “Pandemic times lead to pandemic decisions, which are not usually well thought out.”

Ken Curley, a retired Army colonel and president of Raymond Associates, questioned why the state didn’t go to a manufacturer such as 3M, which already makes N95 masks, to broker a better deal.

“The state has a lot of leadership, juice, money,” Curley said.

U.S. company 3M has said the list price for its most common N95 respirators range from 63 cents to $3.40, depending on the model. It’s unclear what the equivalent type of N95 mask BYD is producing for California. Last week, Los Angeles Mayor Eric Garcetti announced a deal with Honeywell for N95 masks that will cost the city 79 cents apiece — though most of the masks in that agreement won’t arrive until the summer and fall; the ones purchased from BYD were expected to arrive this month.

Emails obtained through a records request show state officials notified the state treasurer’s office that there was a 90% chance of a large personal protective equipment deal April 6.

The next day, April 7, the invoice was apparently sent to state officials by BYD and Newsom went on a national TV show that night to announce the deal. His administration quickly sent notification of the expense to the Joint Legislative Budget Committee.

On April 8, Thomas Todd at the California Department of Finance emailed the treasurer’s office saying that the deal was all set.

“Per the governor’s announcement last night, this payment has become certain (pending 72-hour notification to the Legislature),” Todd wrote. “The amount is now $495 million, and we will want to make the payment on Friday (the first day we can do so after the 72-hour notification).”

Following that email, officials at the treasurer’s office asked if the vendor had been vetted. Thomas replied that “they’re vetting the vendor as we speak.”

BYD announced in March that it had shifted its manufacturing from vehicles to protective gear. Its U.S. subsidiary, headquartered in Los Angeles and long promoted by the state for its electric bus production, helped arrange the deal. Global Healthcare Product Solutions, the limited liability company set up by the company in March, shares the same address as BYD’s headquarters in L.A.

In describing the vetting process, Tabitha Stout of the Governor’s Office of Emergency Services told the treasurer’s office the state agency followed standard practices for contracting in an emergency and included Federal Emergency Management Agency contracting terms in the deal.

“During the initial engagement with the vendor, Cal OES confirmed that FEMA along with large medical supply companies vetted this manufacturer as well,” Stout wrote in an email April 9.

In all, Newsom administration officials have said the agreement with BYD will produce 200 million masks per month through the end of June. The N95 masks, expected to total 150 million of that amount, must still first be approved for effectiveness by the National Institute for Occupational Safety and Health. BYD’s Girardot said on Wednesday that the process may be delayed until the end of May.

The governor on Wednesday called it a “little bit” of a delay, though it could mean the sought-after masks arrive more than a month late.

“All these things work out themselves,” Newsom said.

The Bay Area’s stay-at-home orders will continue to be enforced even as Gov. Gavin Newsom prepares to announce potentially more relaxed statewide guidelines, San Francisco city officials said Wednesday.

During a news conference, Mayor London Breed said the city has been working to learn the exact details of Newsom’s new guidelines, but she stressed that that Bay Area health officers can continue to order tighter restrictions.

The reason has “everything to do” with the numbers of cases and deaths in the Bay Area, she said.

“The numbers are still going up,” she said. “The number of deaths are still going up, and we have not lowered the curve, and we have to be mindful of that.”

“The more that people have interactions with other people,” she added, “the [greater the] likelihood that other folks will continue to get infected.”

Dr. Grant Colfax, San Francisco’s public health director, said one of the goals that needs to be met before reopening is the ability to trace contacts of infected people and test them for the coronavirus.

“We are still building our surveillance system across the Bay Area,” he said. To do that, local officials are working with scientists from the city’s public hospital, UC San Francisco and UC Berkeley.

“We must hold steady and let the data guide us,” he said.

He said city officials have been asked many questions about how Newsom’s new guidelines will affect San Francisco.

“Let me be clear, the San Francisco and Bay Area health orders currently do not permit curbside pickup from nonessential retailers,” he said. Restrictive orders take precedence over more relaxed guidelines, he added.

In response to reporters’ questions, he urged people not to visit family on Mother’s Day, even if wearing masks and keeping six feet apart.

Unless residents live in the same households with their mothers, “the greatest gift we can give to our mothers this Mother’s Day is to stay away,” he said. “Don’t go visit your mom in person this year.”

He said 27,334 residents had been tested for the virus as of Wednesday, and about 8% were positive.

City officials also announced that the homeless population in San Francisco has grown during the pandemic. Homeless individuals from other counties have moved to the city in search of hotel rooms, which the city has leased for the most vulnerable members of its longtime homeless population.

The city is now working to move some street and sidewalk tent encampments in the low-income Tenderloin district to other sites and will close some streets so people in tents can socially distance, officials said.