Sacramento Report: Newsom Tells Counties ‘No More’ On Homelessness Funding

Gov. Gavin Newsom gave his final annual address to the Legislature this week, where he touted his administration’s efforts on homelessness, saying that the number of homeless people in the state dropped overall in 2025. On Friday, the finance department also released its preliminary budget for the 2026-27 fiscal year, which proposes to give $500 million toward the state’s principal homelessness program.

That’s half the $1 billion that has been allocated for the program annually since 2019, except for this fiscal year when it was gutted completely.

Housing and homelessness advocates were disappointed with the proposal and have continued to ask for the full funding to be restored.

Mayor Todd Gloria, who has taken an aggressive stance toward removing encampments and placing hundreds of people in shelters, has defended the program and attributes the funding to a reduction in the city’s homeless population which dropped by nearly 14 percent in the city and 7 percent in the county from 2024 to 2025, according to the Regional Task Force on Homelessness.

The city, which has been awarded nearly $100 million overall from the program and $24 million in the latest round of funding in 2024, uses the grants for temporary housing and shelters, helping to fund thousands of shelter beds The county uses the money to provide mental health services.

Newsom has previously suggested implementing accountability requirements or metrics before disbursing more money.

In Thursday’s State of the State speech, Newsom accused counties of not doing enough with the funding they have been given to provide mental health services, reigniting his longstanding criticism of local governments on the issue.

“No more excuses. It’s time to bring people off the streets,” Newsom said.

Friday’s proposal was just the beginning of budget talks, and the governor’s administration will come back with another proposal before negotiations begin in earnest in June. Lawmakers have until June 15 to finalize the budget.

A Circular Blame Game

As I mentioned previously in the Sacramento Report, restoring money for the program, called the Homelessness, Housing, Assistance and Prevention grant, is the mayor’s biggest request from the state and has been so for several years.

Gloria was in Sacramento earlier this week rallying lawmakers to support restoring the funding. Newsom, who faced a $12 billion budget deficit last year, will have to balance priorities once more amid steep federal funding cuts that are expected to affect key programs such as Medi-Cal. 

On Friday, however, the governor projected a much smaller deficit of nearly $3 billion with no new expansions or investments in social service programs, including housing or homelessness overall, which faced more than a 56 percent cut compared to this year’s budget.

“There’s consensus amongst mayors that we need that, and I think what’s happening at the federal level makes that even more important,” Gloria told Voice of San Diego. “I think they get it, but I don’t know how this gets to be a priority.”

Gloria has continued to accuse San Diego County, which is responsible for providing mental health services, as not effectively using the funds to provide mental health services.

“A lot of them have unexpended balances,” Gloria broadly said of counties struggling with the issue. “My city has spent my money.”

The city of San Diego has been awarded nearly $100 million since the program’s inception in 2019 and it received $26 million in its latest round of funding in 2024.

Graham Knaus, CEO of the California State Association of Counties, said after Friday’s proposal that he hopes funding is restored to the full $1 billion as negotiations continue.

State of the City Address Next Week

San Diego is facing a $110 million deficit next year, a decrease from the $300 million shortfall for the 2025-26 fiscal year, according to the city’s finance department. Balancing the deficit will likely be the focus of his address to the city next Thursday.

Last year, Gloria emphasized cost-cutting, which included slashing top administrative roles, reducing library hours and finding new sources of revenue through paid parking fees.

Prop. 4 Funding, Consumer Protection to Kick Off the Year

Hourslong committee hearings are rock-and-rollin’ again in the state Capitol now that lawmakers are back in session. 

Amid a Jan. 31 deadline to move along bills that didn’t get a vote on the floor of at least one chamber last year must do so by the end of the month, lawmakers are in a bit of a sprint.

This week, Assemblymember David Alvarez, along with other members of the delegation, revised a previously unrelated bill to pull Proposition 4 funding toward addressing the sewage in the Tijuana River. Previous legislation to direct Proposition 4 dollars to the river had been slowed by state regulatory requirements that San Diego lawmakers are trying to ease.

A committee hearing is scheduled for next Monday, and San Diego County Supervisor Paloma Aguirre — who has led the effort for more state attention to the issue — will be there.

Assemblymember Chris Ward of San Diego introduced a bill to ban data brokers from selling sensitive personal information such as consumers’ immigration status. It builds on previous legislation he proposed last year to protect users from surveillance pricing and location tracking.

And Sen. Catherine Blakespear of Encinitas filed a bill that would make it easier for victims of domestic abuse to be granted a restraining order against military members who have a proven history of domestic violence.

What I’m Reading Now

San Diego Mayor Todd Gloria is refusing to back off on the new parking fees at Balboa Park despite pushback from city officials and residents, KPBS writes.

The California exodus isn’t just for billionaires. U-Haul data shows that middle low-income residents continue to leave the state in droves due to affordability, the Los Angeles Times reports.

The city of Del Mar wants to meet with Attorney General Rob Bonta over its role in blocking a housing project, KPBS explains.

Thanks again for reading this week’s report! Please reach me at nadia@voiceofsandiego.org for any tips.

The post Sacramento Report: Newsom Tells Counties ‘No More’ On Homelessness Funding appeared first on Voice of San Diego.