California’s Legislative Analyst Spots Potential Pitfalls in Governor’s Homelessness Plan

SACRAMENTO, Calif. (CN) – California’s legislative analyst Tuesday ripped Governor Gavin Newsom’s proposed $1 billion homelessness plan and urged lawmakers to counter with a more focused, goal-oriented strategy for one of the state’s most vexing problems.

In a new report, the nonpartisan Legislative Analyst’s Office advised caution with Newsom’s sweeping plan, calling it unclear and rife with potential implementation headaches.

A homeless woman moves her belongings from a street near Los Angeles City Hall. (AP Photo/Richard Vogel)

“We recognize that there is no obvious right answer as to how the state should address the homelessness crisis,” the report opens. “That said, we find the governor’s budget proposal falls short of articulating a clear strategy for curbing homelessness in California.”

Kicking off his second year in office, Newsom last month unveiled a $1.4 billion plan to remove and keep people off the streets.

The plan centers on a $750 million one-time general fund infusion to immediately address street-level homelessness, as well as a $695 million upgrade to the state’s social health care system to help it serve homeless individuals and those with mental health disabilities. The former San Francisco mayor also made 100 state-owned camp trails available for temporary housing and created the California Access to Housing and Services Fund.

Two days later during a budget introduction press conference, Newsom told reporters that he would be heavily involved going forward and own the issue.

“I’m the homeless czar in the State of California,” Newsom said, stamping his name on the issue.  

But the analyst’s office, which provides the California Legislature with fiscal and policy advice, says lawmakers might want to consider rejecting Newsom’s rough draft proposal.

It does not take issue with the amount of money proposed, but the analyst’s office says Newsom’s plan could cloud the actual process of getting taxpayer dollars to local governments. In recent years, money included in the budget for fighting homelessness was largely doled out directly to local officials.

According to the report, the plan would task the newly minted California Access to Housing and Services Fund with drawing regional boundaries and deciding how to allocate funds. It also notes that the state’s already overburdened Medi-Cal system would have to play a larger role under Newsom’s plan.

It is unclear whether the extra layers of bureaucracy would have a beneficial impact, the report warns.

“In the absence of a clear strategy, state resources could be allocated in a less targeted/coordinated way. As a consequence, we believe the governor’s proposed approach is less likely to make a meaningful ongoing impact on the state’s homelessness crisis,” the 32-page report states.

Newsom’s office pushed back on the report, claiming that the governor’s proposal will increase accountability and continue his “aggressive and far-reaching approach to homelessness and housing.”

“As the governor said when he unveiled this proposal, if you keep doing what you’ve done, you’ll get the same result. 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,” Newsom spokesperson Jesse Melgar said in an email.

Newsom is facing pressure at home and from the federal government to reduce a homeless population that has spiked to an estimated 151,000. According to federal data, 27% of the country’s homeless reside in California, even though voters have approved billions in bonds for affordable housing and improved mental health services in recent years.

Over Christmas, President Donald Trump blasted Newsom on Twitter for “doing a really bad job taking care of the homeless population,” while a recent statewide poll found 63% of likely voters were very concerned with homelessness.

The analyst’s office argues allowing regional officials – and potentially nonprofits – to be more heavily involved in dishing out funding strays from Newsom’s goal of cutting regulatory red tape.

“This could shift decision‑making authority away from local governments and to the newly designated regional administrators. Moreover, there is the possibility that through the regional administrator model, local governments currently receiving state homelessness funding would no longer do so,” the report states.

Negotiations on the homelessness plan and the other items in the $222 billion spending plan are ongoing between Newsom and lawmakers. Governors typically release a revised budget in May while the Legislature must approve a final plan by June 15.

The analyst’s scathing report will likely be discussed by lawmakers and the mayors of San Francisco, San Jose and Oakland on Thursday at a budget hearing on homeless funding.

Instead of green-lighting Newsom’s blueprint, the report recommends lawmakers come back to the bargaining table with their own homelessness plan. It says their potential counter should outline clear goals, set strict responsibilities for both state and local agencies and outline an oversight mechanism to make sure money is accounted for and funneled to the right places.

If talks between Newsom and the Legislature stall over the next few months, the report suggests they maintain the status quo and continue working on a comprehensive plan.

“We urge the Legislature to develop a clear strategy for the state’s response to the homelessness crisis. The scale of the homelessness crisis in California is significant and even substantial investments in resources could quickly dissipate without demonstrating much progress if investments are made without a clear plan,” the report concludes.

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