Despite having a budget surplus reported in January, California was the first state in the U.S. to borrow $348 million from the federal government, Dow Jones reported Monday. The state has a “possible credit line of up to $10 billion from the U.S. Treasury Department,” according to Dow Jones, to fund unemployment benefit claims.

Since the week ending March 14 through the week ending April 25, the state has processed more than 3.5 million initial unemployment claims and paid $4.5 billion in benefits as a result of the state’s shelter-in-place order.

Illinois and Connecticut have also been approved for loans from the U.S. Treasury Department—Illinois will get $12.6 billion in total credit line and $1.1 billion will go to Connecticut, although neither state has accessed the loan money, Dow Jones reported Monday.

Despite a disproportionately low rate of infection and lower death rate than influenza, and a record 3.5 million people out of work in one month, California remains largely shut down.

“On Friday I said we were days not weeks from announcing modifications to the stay-at-home order, and today we are announcing our efforts to update the stay-at-home guidelines and begin the process of moving to Stage 2,” Newsom said during his daily press briefing Monday.

Since mid-March, the state has been operating under phase one of the state’s plan to reopen, only allowing essential personnel to work and freely travel. Phase two includes expanding access to retail stores and associated manufacturing and supply chains for retail. Retail stores allowed to open with restrictions include bookstores, clothing stores, florists and sporting goods.

Counties can attest that they met state readiness criteria, and create and submit a readiness plan that is publicly available to speed up the process.

However, unlike other states, California allows for counties and municipalities to maintain their own orders. Newsom said the Bay Area, which has as stricter order, “has the right” to enforce it.

“The Bay Area has guidelines that are a little more strict,” he said. “If they choose not to comply with those guidelines, they have that right.”

Reversing from his position of a hard close of beaches, Newsom said the state approved plans to immediately open Laguna Beach and San Clemente after peaceful beachgoers, and later protesters, were arrested in Orange County.

The plan allows residents to immediately access the coastline for active recreation, including swimming, surfing and running on the sand, with limitations to prevent overcrowding that also implements social distancing.

“We appreciate the governor’s willingness to work with us to provide a responsible, gradual approach to reopening all beaches in Laguna Beach for active recreation,” Mayor Bob Whalen said in a prepared statement. “This will allow people the opportunity to walk, jog, swim and surf and get some fresh air and exercise on a limited basis, but not congregate or gather in large groups.”

Laguna Beach city officials submitted a four-phase plan to eventually reopen their beaches. Phase one begins Tuesday, allowing the public to use the beach for active purposes only on weekdays for four hours from 6 a.m. to 10 a.m.

San Clemente’s plan allows active usage of the beach and keeps restrooms and parking lots closed.

As a former businessman, Gov. Newsom said, he understands the frustration of business owner’s financial and mental health. “Know that your voices are being heard,” Newsom said. However, at the same time, he warned, “Some businesses that are not waiting for these announcements… there will be consequences for doing so.”

To date, 80 bars have been closed so far, he said, adding, “Public health officials will do what they can to get people to do the right thing and abide by these orders.”