California lawmakers want $1 billion to combat homelessness. But Governor Newsom has a new focus

As California lawmakers and Gov. Gavin Newsom argue over what to cut and what to keep to address the state’s estimated $45 billion budget deficit, funding for another round of $1 billion to combat homelessness is in the crosshairs.

Newsom’s revised budget proposed cutting $260 million in extra money from the Housing, Assistance and Prevention Program for Homeless People, or HHAP, which provides flexible subsidies for cities, counties, and statewide caregiving. The current fifth round of funding in the 2023-24 budget is still distributing $1 billion.

While the joint legislative budget plan released last week provides $1 billion to local governments to continue fighting homelessness, the governor’s revised budget does not set aside the money for a sixth round of funding. Newsom has been moving forward on another front regarding homelessness and mental health, focusing on a narrower group of homeless people.

Potential cuts to HHAP have worried local leaders who have become dependent on the funding, although several use their own city and federal funds to pay for shelters and other services. Counties appealed to lawmakers and the governor to continue the $1 billion annual grant, calling it a lifeline.

“We cannot abandon this progress now… Without HHAP, the progress we were making will disappear,” San Diego Mayor Todd Gloria, chairman of the California Big City Mayors Coalition, said during a recent news conference, citing multiple negative consequences that could follow, such as the closure of shelters and the return of many homeless people to the streets.

“In short, it will be a disaster,” Gloria said.

With the new fiscal year beginning July 1, the Legislature must approve a budget by June 15. Once the budget bill is sent to the governor, he will have 12 days to act on the legislation.

Newsom previously punished to legislators on the question of whether HHAP funding should continue in the future. “The Legislature, in its wisdom, will make that decision based on what they believe should be prioritized in this budget,” he said. “And they can make a decision if they want to continue at the appropriate levels that we have seen in the past.”

A spokesperson for Newsom said Friday that the administration is reviewing the Legislature’s proposal.

“The administration will continue to work with the Legislature and stakeholders to deliver a balanced budget in June that reduces spending, makes government leaner, and preserves the state’s ongoing fiscal integrity to protect the essential services that working Californians depend on,” the spokesperson said in a statement. declaration.

A Funding Snapshot

A recent state report finds that recipients of the annual grant to combat homelessness are spending most of the dollars they received in the first two rounds and the money appears to be having positive results.

The California Interagency Council on Homelessness report provides a snapshot of the first four rounds of HHAP funding. Among other areas, it covers how money is being used by local governments.

“In terms of spending, the state is seeing HHAP recipients spend the majority of their funding to move Californians experiencing homelessness into temporary and permanent housing solutions,” the report notes.

Using six performance measures to evaluate homelessness investments from local, state, and federal funding sources for years 21-22 and 22-23, including HHAP, initial data shows that:

• Although more people are housed in the state year after year – 63,237 in 2022 and 72,298 in 2023 – more people are becoming homeless – 162,684 in 2022 and 184,334 in 2023.

• The number of Californians accessing services while homeless and obtaining permanent housing increased from 298,739 to 349,519 over the same period.

“The increase in the number of Californians accessing services indicates that investments in solutions like those funded by HHAP have created more opportunities to expand programs, reach more people year after year, and achieve deeper penetration of services into communities,” the report states .

The Newsom administration criticizes recipients for not spending all of their HHAP funding more quickly.

“The report makes clear that a large portion of recent rounds of funding has not yet been secured, let alone spent, meaning locals have the money and are just keeping it,” said a spokesperson for the governor’s office. “The state has set deadlines for these dollars to get out the door and the clock is ticking,”

Data through December 2023 shows that most of the money from rounds one and two has been spent. More than US$727 million was spent; more than $175 million remains unspent. Recipients still have time to meet bond deadlines for rounds three and four, and HHAP staff will work directly with those who have outstanding balances to encourage them to move forward more quickly.

Newsom’s focus

While the fate of the $1 billion for the next round of HHAP funding has yet to be decided, the governor has focused on money from Proposition 1, a bond measure he championed that was approved by voters in March by one vote. very fine. margin. Proposal 1 mobilizes nearly $6.4 billion to reach those who are in crisis, chronically homeless, or have mental health or substance abuse issues, as well as for veteran housing.

Last month, Newsom announced he would speed up releasing $3 billion to build or renovate mental health treatment centers from voter-approved Proposition 1 funds.

Proposal 1 reconfigures the California Mental Health Services Act to redirect most of its funding from counties to the state for building facilities and housing for the chronically homeless.

The mayors of California’s largest cities have said that HHAP and Proposition 1 are complementary and that funding for both is needed to combat the state’s homelessness crisis.

The governor also promoted the CARE Act, a statewide mental health district court system designed to mandate treatment for people with serious mental illnesses, urging counties to urgently move forward with homelessness reforms and initiatives. Prop. 1 money will provide housing that would allow the CARE Court to function.

‘More work must be done’

As the state’s homelessness crisis has grown, the governor has increasingly called for accountability of those who receive money to combat homelessness, an appeal that the mayors of big cities they say they hug. A reimagined accountability unit will monitor HHAP plans submitted by cities and counties and ensure cooperation among multiple groups

More than 181,000 Californians are homeless on any given night in 2023, according to the U.S. Department of Housing and Urban Development.

By itself, the California Interagency Council on Homelessness report continues, HHAP provides services to up to 130,000 Californians experiencing homelessness each year.

“If the number of people experiencing homelessness were static, California would be more than two-thirds of the way to housing the 181,000 Californians experiencing homelessness on a given night,” the state report notes.

The rate at which homeless people are being placed in some sheltered housing is in line with data from across the country and “is impressive for a state with a scarce housing supply like California,” the report states.

The administration said the report’s results point to progress, “but more work needs to be done.”

O Coalition of Big City Mayors implored lawmakers and the governor to keep HHAP money flowing, saying failure to do so would delay progress in combating homelessness across the state.

“And I will conclude with this from our state’s own Interagency Council on Homelessness. They released a report today on the efficiency and effectiveness of HHAP,” Mayor Gloria said before reading an excerpt from the state report during the recent press conference.

Gloria added, “It’s the state officials themselves who are mentioning and recognizing the effectiveness of this, which is why we must maintain this funding and this is why we are here together today.”