California homelessness funding is on the chopping block

It’s the billion-dollar question. That’s how much cities and other local governments have been receiving from the state each year to deal with California’s ever-increasing population of homeless people.

But after five years, will the aid from Sacramento continue as Gov. Gavin Newsom and legislative leaders try to close a massive state budget deficit?

Newsom has been critical of local homelessness efforts and his newly revised 2024-25 budget not only pulls back an extra $260 million that local officials had counted on receiving this year, based on meeting specific goals. The proposal doesn’t include anything for another year.

“I know that may not sit well with some,” Newsom said as he released the revision last month, “but we’re struggling with seeing the performance I want to see on the streets.”

Last week, legislative leaders released their own version of the budget. Pointedly, it includes $1 billion to continue the grants to local agencies for a sixth year.

Local officials, particularly those from major cities where homelessness is most evident, are doing what they can to have the $1 billion included in the final budget that Newsom and legislative leaders must pass by next week.

“We cannot abandon this progress now,” said San Diego Mayor Todd Gloria, chair of the California Big City Mayors coalition, as he and other mayors issued a public plea. Without it, Gloria said, “the progress that we were making will vanish,” citing  consequences of closing shelters and other programs financed by the grant program.

“In short, it will be a disaster.”

While Gloria cites “the progress that we are making,” Newsom has repeatedly chided local officials for not making more progress. Since he became governor in 2019, the official count of homeless people in California has risen from 151,000 to 181,000 despite state expenditures of at least $25 billion, including the local grants.

But who is truly responsible for having spent so much money for so little progress?

In April, State Auditor Grant Parks issued a report that was highly critical of the California Interagency Council on Homelessness (Cal ICH), composed of Newsom administration appointees, for failing to track how the billions of dollars have been spent.

Noting that his office had warned about a “lack of coordination among the state’s homeless programs” three years earlier, the April report said the agency had tracked spending for two years, but “has not continued to track and report on this information since that time.”

Moreover, Parks said, “it has not aligned its action plan for addressing homelessness with its statutory goals nor has it ensured that it collects accurate, complete and comparable financial and outcome information from homelessness programs. Until Cal ICH takes these critical steps, the state will lack up‑to‑date information that it can use to make data‑driven policy decisions on how to effectively reduce homelessness.”

While running for governor in 2018, as the homeless crisis was becoming evident, Newsom promised to appoint a “homelessness czar” who would shake up the bureaucracy and focus on reducing the number of unhoused Californians.