As California stares down a massive budget deficit, the mayors of the Bay Area’s largest cities are urging Gov. Gavin Newsom and state lawmakers to avoid cuts to homelessness services and dedicate $1 billion a year to helping local governments manage the crisis.
This week, the California Big City Mayors coalition, including the mayors of San Jose, Oakland and San Francisco, called on state officials to continue funding a program that since 2019 has sent $4 billion to cities and counties to combat homelessness.
While current budget plans don’t include cuts to the Homelessness Housing, Assistance and Prevention program, the state hasn’t committed to extending it beyond this year. Local officials use the money for various services, from street outreach to building new homeless shelters, and say the funds have been crucial to tackling one of the state’s most dire challenges.
“These dollars have changed hundreds of lives in our city and across the state, and are one of the single most impactful investments the state could make in ending the era of encampments,” San Jose Mayor Matt Mahan said in a statement.
But the plea comes on the heels of an audit critical of California’s homelessness spending released earlier this month.
The California State Auditor found the state has failed to track whether the more than $24 billion it spent fighting homelessness over the past five years is actually helping its unhoused population, now estimated at 181,000 people. An accompanying audit of homelessness programs run by San Jose and San Diego highlighted similar findings.
After the audits were released, Newsom announced new accountability measures for cities and counties receiving state homelessness funding. In a statement responding to the Big City Mayors, the governor’s office said Newsom looked forward to “continuing to work with leaders willing to put forward real solutions” but that local officials must do more to ensure the money is going to good use.
“Many local jurisdictions have yet to obligate, let alone spend all of the money allocated to them by the state,” his office said. “With billions more in state funds already approved for cities and counties over the next several years, localities must maximize taxpayer dollars to address homelessness.”
The public has grown increasingly weary of encampments and jarring scenes of human suffering in nearly every corner of the state.
A drone view of city-created 100-bed cabin shelters on the site of the former Wood Street homeless encampment in West Oakland, Calif., on Wednesday, April 10, 2024. (Jane Tyska/Bay Area News Group)
In San Jose, Mahan said millions of dollars from the state program have helped the city erect almost 500 tiny homes and cabin shelters, which he said contributed to a more than 10% drop in the number of people living on the street last year. San Jose had an estimated 6,340 homeless residents, with 4,411 living outdoors and in vehicles and another 1,929 in shelters.
Homeless service providers said dedicated, ongoing funding is crucial to their efforts. Homekey, a state program that provides one-time grants to local governments for homeless housing and shelters, has funded more than 15,000 planned or completed units since it started during the coronavirus pandemic, but some providers and officials are scrambling to ensure projects remain funded into the future.
“One-time funding for homeless services and the development of affordable housing poses real challenges for local governments working to make sustainable reductions in homelessness,” Jennifer Hark Dietz, chief executive of PATH, a service provider that works in Santa Clara County, said in a statement.
Oakland Mayor Sheng Thao, who was briefly unhoused and slept in her car with her infant son after fleeing an abusive relationship, urged the state to continue supporting big cities “on the front lines of the homelessness crisis.”
“As someone who was homeless as a young mother and lived much of my life trying to survive without secure and stable housing, I know how much having a dignified place to stay can help end the cycle of homelessness,” Thao said in a statement. Oakland had roughly 5,000 homeless people in 2022, according to the most recent count.
San Francisco Mayor London Breed added that state funding has “helped nearly 5,000 people in San Francisco secure temporary shelter in the form of hotel rooms and shelter beds while they work towards long-term housing solutions.”
While Newsom and Democrats who control the state legislature haven’t proposed major cuts to any homelessness programs, local officials and service providers are keeping a close eye on the negotiations amid a state budget deficit totaling tens of billions of dollars.
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The deficit ballooned over the past year as economic growth slowed and the state exhausted billions of dollars in federal aid during the pandemic. Exactly how large the shortfall is, however, remains unclear.
In January, Newsom insisted it was about $38 billion. But the nonpartisan Legislative Analyst’s Office said it was actually $58 billion. Then in February — after state revenues continued to come in below expectations — the analyst’s office revised its estimate to as much as $73 billion.
Earlier this month, lawmakers agreed to $17 billion in savings, including delaying planned spending on transit infrastructure and preschool programs.
Newsom and lawmakers have until June 15 to finalize the budget for the next fiscal year.
The Associated Press contributed to this report.