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Breed, California mayors push for homelessness funds amid budget crunch

San Francisco Mayor London Breed speaks at a press event in San Francisco's Anza Vista neighborhood on Jan. 30, 2022. | Ekevara Kitpowsong

San Francisco Mayor London Breed and a coalition of mayors from major California cities banded together Wednesday to urge Gov. Gavin Newsom and the state Legislature to carve out more funds for homelessness from the state’s dwindling coffers. 

At a press conference in Sacramento, the mayors—who included San Diego Mayor Todd Gloria, San Jose Mayor Matt Mahan, Los Angeles Mayor Karen Bass and others—asked state officials to dedicate $1.5 billion to Project Homekey and $2 billion to Homeless Housing Assistance and Prevention, a flexible grant program that can be used for shelters or other immediate solutions. 

“We have been advocating for years for funding that is predictable and sustained [...] the level of need in our cities is so significant,” Breed said. “We need to keep the momentum going.”

In a May 11 letter to Newsom and state legislators, including Assembly Budget Committee Chair Phil Ting, state Senate President pro Tempore Toni Atkins, Assembly Speaker Tony Rendon and other legislators with influence over California’s purse strings, the coalition cited the state’s rising homeless population and asked for a total of $6 billion in Homeless Housing Assistance and Prevention funding over the next three fiscal years along with $1.5 billion in Homekey funds, which San Francisco has used to buy underused hotels and apartment buildings to shelter homeless people. 

San Francisco has acquired six properties totaling 799 units with Homekey funding and is applying for a seventh project. The city has used Homeless Housing Assistance and Prevention funding for building and operating shelters, supporting a youth drop-in center and delivering services at shelters, according to the Mayor’s Office.

But the request for additional, ongoing funds from the state may be a tall order in light of its eye-popping budget deficit of nearly $32 billion.

That figure, revealed in Newsom’s May budget revision last week, is $10 billion higher than what state budget analysts estimated in January. Largely due to its reliance on taxes from individuals whose wealth is tied to the stock market, California is one of a few states facing a budget shortfall in the coming year.

At a May 12 media briefing, a Newsom aide said that the governor’s revised budget closed the deficit without a major impact to “key programs” and emphasized accountability in how funds are spent. 

“Despite the over $30 billion budget problem, we've managed to preserve all of the homeless funding that was originally proposed,” said James Hacker, a deputy cabinet secretary for Newsom’s office, at a May 12 media briefing. On the housing and homelessness side, it's more about implementing the programs that we've got.

Newsom’s budget plan includes $1 billion in Homeless Housing Assistance and Prevention funding only for the next fiscal year, along with $400 million in grants for encampment resolutions, according to the state’s Business, Consumer Services and Housing Agency. It does not include additional Homekey funding, though Russ Heimerich, a spokesperson for the agency, noted that the state will begin issuing awards for an earlier $736 million funding round later this year. The state is also issuing another notice of Homekey funding for multifamily housing “very, very soon,” he said. 

In their own budget plan released in late April, State Senate Democrats proposed tax hikes on corporations that would help pay for $1 billion in ongoing funds for the Homeless Housing Assistance and Prevention program, among other expenditures. However, Newsom swiftly batted down the proposed tax hikes. 

“While budget negotiations are ongoing, my Senate Democratic Caucus colleagues and I agree with the Big City Mayors regarding the need for consistent, sustainable, on-going funding for our state’s Homeless Housing, Assistance and Prevention program,” said Atkins in a statement. 

In an interview, Ting, said in an interview that while state policymakers were “proud” of the Homekey program, finding additional funding will be challenging because it was predominantly funded through federal dollars. 

Ting also echoed Newsom’s calls for accountability in homelessness spending, including in Homeless Housing Assistance and Prevention funds: “The two metrics that everyone cares about are how many people are we getting off the street, and how many people are we getting into permanent shelter,” he said. 

Next year’s budget could get worse, Ting said. The state Legislature must approve a budget bill by June 15. 

“We’ll be sitting down with our Senate partners and going into negotiations,” Ting said.