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

As California lawmakers and Governor Gavin Newsom argue over what to cut and what to keep to address an estimated $45 billion budget deficit, funding for a new round of $1 billion to combat homelessness is in jeopardy game.

Newsom’s revised budget proposed cutting $260 million in additional money from the Homeless Housing, Assistance and Prevention program, or HHAP, which provides flexible grant dollars to cities, counties and for care across the state. A current fifth round of funding in the 2023-2024 budget still provides $1 billion.

Even though the joint legislative budget plan released last week provides $1 billion to local governments to continue combating homelessness, the governor’s revised budget does not set aside the money for a sixth round of funding. Newsom has focused on homelessness and mental health on another front, targeting a smaller number of homeless people.

Potential cuts to HHAP worry local leaders who have become dependent on the funding, even as many use their own municipal and federal funds to pay for shelters and other services. Municipalities have appealed to lawmakers and the governor to continue the $1 billion annual subsidy, calling it a lifesaver.

“We cannot give up on this progress now… Without HHAP, the progress we made will disappear,” San Diego Mayor Todd Gloria, chairman of the California Big City Mayors coalition, said at a recent press conference, citing several negative consequences this could cause. follow, such as closing shelters and returning many homeless people to the streets.

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

With the new budget year starting on July 1, the Legislature must approve a budget by June 15. Once the budget bill is sent to the governor, he has 12 days to take action on the legislation.

Newsom previously addressed lawmakers asking whether HHAP funding should continue in the future. “The Legislature, in their wisdom, will make that decision based on what they believe should be prioritized in this budget,” he said. “And they can decide whether they want to continue to the appropriate levels that we’ve 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 cuts spending, leans government, and preserves the state’s continued fiscal integrity to protect the core services that hardworking Californians rely on ”, the spokesperson said in a press statement. rack.

A snapshot of financing

A recent state report shows that recipients of the annual grant to combat homelessness are spending most of the dollars they received from the first two rounds and that 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. It covers, among other things, how the money is used by local governments.

“In terms of spending, the state is seeing HHAP grantees spend the majority of their funding on getting homeless and homeless Californians into temporary and permanent housing solutions,” the report notes.

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

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

  • The number of Californians experiencing homelessness in permanent housing increased from 298,739 to 349,519 during the same period.

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

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

“The report makes clear that much of the recent funding rounds are not yet obligated, and even less has been spent, meaning locals have the money and are just holding on to it,” a spokesperson for the governor’s office said. “The state has set timelines for these dollars to go out the door and the clock is ticking,”

Data through December 2023 shows that most of the money from the first and second rounds has been spent. More than $727 million has been spent; more than $175 million remains unspent. Recipients still have time to meet the deadlines for the third and fourth rounds, and HHAP staff will work directly with those who have outstanding balances to encourage them to act 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 Prop money. 1, a bond measure he favored that was approved by voters on a razor-thin bond in March. margin. Prop 1 uses nearly $6.4 billion to target people in crisis, experiencing chronic homelessness or with mental health or substance abuse issues, as well as housing for veterans.

Last month, Newsom announced he would be suspending the release of $3 billion for the construction or renovation of mental health treatment centers from voter-approved Prop. 1 funds would accelerate.

Prop. 1 reconfigures the California Mental Health Services Act to divert the majority of funding from counties to the state to build facilities and housing for the chronically homeless.

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

The governor has also pushed the CARE Act, a nationwide system of county mental health courts intended to enforce treatment for people with serious mental illnesses, urging counties to take urgent action on reforms and homelessness initiatives. The money from Prop. 1 will provide housing that allows CARE Court to operate.

‘More work needs to be done’

As the state’s homelessness crisis has grown, the governor has increasingly called for accountability from those who receive money to combat homelessness, a call that major city mayors say they embrace. A redesigned accountability unit will oversee the HHAP plans that cities and counties submit and ensure collaboration among different groups

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

On its own, 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 provide more than two-thirds of the path to housing for the 181,000 Californians experiencing unsheltered homelessness on any given night,” the state report notes.

The rate at which homeless people are placed in sheltered housing arrangements is consistent with data nationwide and “is impressive for a tight housing supply state like California,” the report said.

The government said the results of the report indicate progress has been made, “but more work needs to be done.”

The Big City Mayors coalition has begged lawmakers and the governor to keep the HHAP money flowing. Failure to do so would reverse progress in the fight against homelessness across the state.

“And I’ll close with this message from our state’s 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, “That’s the state’s own people mentioning and recognizing how effective this is, that’s why we need to keep this funding, and that’s why we’re here together today.”