SACRAMENTO — Gov. Gavin Newsom’s budget proposal likely won’t have a meaningful impact on the nation’s largest homeless population, according to a new analysis from the state’s nonpartisan Legislative Analyst’s Office.

Newsom’s proposal “falls short of articulating a clear strategy for curbing homelessness in California” by shifting decision-making authority away from local governments that have historically handled the bulk of homeless services in the state, the LAO wrote in a report released Tuesday.
State officials have taken a more active role in funding homeless service programs, sending $1.2 billion to local governments over the past two years to bolster their efforts.
This year, Newsom wants to spend another $750 million. But instead of giving it to local governments, the money would flow to regional administrators who would decide how to spend it. Those administrators would be chosen by the state Department of Social Services.
“Local governments are most knowledgeable about the specific homelessness-related challenges facing their communities and are well positioned to implement the combination of strategies that will work best for them,” the LAO wrote in a report prepared by analyst Lourdes Morales and others.
While homelessness in most states declined between 2018 and 2019, California’s homeless population increased 16% to about 151,000 people as of January 2019. That increase is responsible for the jump in homeless populations nationwide, prompting a feud between the Newsom and Trump administrations about who is responsible.
“As the Governor said when he unveiled this proposal, if you keep doing what you’ve done, you’ll get the same result,” Newsom press secretary Jesse Melgar said. “We strongly disagree with the assertion that emergency funding to fight homelessness should be spread thinly, with less accountability and in keeping with business as usual.”
Under Newsom’s proposal, state taxpayers would put $750 million into a fund to pay for homeless services. Others, including local governments, charities and companies, could also contribute to the fund.

Newsom Is Putting ‘One-Time Money’ in the Fund

The plan is based on a similar fund in Los Angeles County, which began with an initial contribution of $14 million from taxpayers and $4 million from donations. Newsom has suggested the money could help people on the verge of homelessness pay their rent. And it could also pay for improvements to private homes that serve adults and seniors — homes the governor’s office says have been closing recently because they can’t afford to stay open.

“The Governor’s proposal aims to use the new fund as a catalyst for wraparound services to get people off the street and calls on locals to do the same,” Melgar said. “It’s in keeping with the Governor’s aggressive and far-reaching approach to homelessness and housing since taking office — deploying more state resources to cities and counties than ever before and enacting new laws to speed housing construction.”
But the money Newsom is putting in the fund is “one-time money,” meaning it won’t be available again next year after it’s been spent. That’s why the LAO says it is not a good idea to use it to pay for recurring expenses, like rent subsidies.
“As a result, whether the Governor’s proposal would have an enduring effect on preventing homelessness among at-risk individuals is much less clear,” the LAO wrote.
California lawmakers are scheduled to hold their first in-depth hearing on Newsom’s homelessness proposal on Thursday in San Francisco. The mayors of San Francisco, Oakland and San Jose are scheduled to testify.
Assembly Budget chairman Phil Ting, a Democrat from San Francisco, said the hearing will “allow us to develop a strategy and determine how additional monies should be spent in the future.”
“Unfortunately, there isn’t one solution that can solve homelessness,” Ting said. “It’s a complex issue, requiring multiple approaches.”