Gov. Gavin Newsom speaks to members of the media at the Marine Corps Air Station Miramar on Nov. 3, 2022.
Gov. Gavin Newsom speaks to members of the media at the Marine Corps Air Station Miramar on Nov. 3, 2022. / Photo by Ariana Drehsler

As California faces a yawning budget deficit, Gov. Gavin Newsom is proposing big cuts to homeless spending, which advocates warn could set back efforts to get people into housing.

Newsom is crunching budget numbers and they don’t look good. In his updated proposal, called the May revision, Newsom estimates next year’s budget gap to be about $27.6 billion, with another projected shortfall of $28.4 billion in 2025-26, for a two-year total deficit of $56 billion.

To help close the gap, he proposed trimming one-time spending by $19.1 billion and ongoing spending by $13.7 billion, slashing state operations and eliminating 10,000 unfilled jobs.

Newsom released a laundry list of proposed reductions and fund shifts to state programs and institutions. The University of California is taking a hit, as are scholarships, early childhood education, climate action, water resources, and other priorities.

But local government officials are particularly incensed about cuts to homeless programs, arguing that will undo years-long efforts to expand shelters and housing assistance.

“If the state wants to reverse the trend of more people falling into homelessness, cutting off funds for programs that are keeping tens of thousands of people indoors and off the streets isn’t the way to do it,” San Diego Mayor Todd Gloria said in a statement on behalf of the Big City Mayors coalition. (Gloria is grappling with his own budget cuts that could impact homeless services and funds for affordable housing. Planetcob’s Lisa Halverstadt has been following those proposed cuts. Read more here.)

A firetruck passes a homeless encampment on National Avenue in the East Village on May 19, 2023.
A firetruck passes a homeless encampment on National Avenue in Barrio Logan on May 19, 2023. / Photo by Ariana Drehsler

The coalition’s greatest concern is Newsom’s plan to eliminate funds to the state Homeless Housing, Assistance and Prevention Grant Program, known as HHAP. This deep funding source contributed $1 billion per year to local shelters, outreach programs and other services for the past five years.

Newsom doesn’t plan to renew the program, so he’s excluding it from this year’s budget.

He also wants to claw back another $260 million previously promised to local governments.

Advocates say that will leave a big void in homeless funding.

“Inconsistency in funding from the state is locking us into a permanent crisis on the homelessness front,” said Alex Visotzky, a senior California policy fellow with the National Alliance to End Homelessness.

Last year the city of San Diego received nearly $30 million from the program. That paid for 1,072 shelter beds - more than half the city’s total - as well as storage bins for shelter residents, safe parking lots and other services, San Diego Government Affairs Director Walt Bishop said.

Gloria and other city officials are pressing the governor and legislature to restore homeless funds, he said. If that money is cut, it’s unclear how San Diego will manage without it.

“This is our top resource in funding our overall system, and if you take that out of the equation, that’s going to make for some tough choices,” Bishop said.

There are also calls for sober housing. On a separate front, state lawmakers are revisiting the state’s “housing first” policy, which guarantees people a place to live without any requirements for mental health or addiction treatment. Lawmakers say that while the no-strings-attached approach to shelter works, there’s also room for sober housing options.

California’s “housing first” approach to homeless services means that getting people a place to live takes precedence over substance abuse and mental health treatment, job training or other services.

The premise is that people can’t attend to other life issues until they’re in stable housing, so imposing strict conditions can leave people perpetually homeless.

There’s pushback against that policy; critics argue that housing first forces people who don’t have substance use issues, or those in recovery, to live among others who are actively using drugs or alcohol.

For now, programs that don’t comply with housing first aren’t eligible for state grants, so any that require sobriety must seek private funds.

Voice’s North County reporter Tigist Layne wrote about one such program, Solutions for Change, a Vista nonprofit that offers housing, job training and behavioral health services, and is vying to buy a Vista ranch to expand its efforts.

Some lawmakers say the state need not choose between housing first and abstinence-based housing, but can offer both. Two bills propose expanding options to allow people to choose sober living facilities.

AB 2893, introduced by Assemblymember Chris Ward, D-San Diego, and AB 2479 would allow the state to fund housing that emphasizes abstinence, as long as it directs three-quarters of homeless funding to programs without such conditions.

Bill to Restrict Sexual Predator Placement Advances

After five years and three bills aiming to tighten requirements for placing sexually violent predators, state Senate Minority Leader Brian Jones is nearing success. On Thursday the Senate Appropriations Committee unanimously passed his “Sexually Violent Predator Accountability, Fairness, and Enforcement Act.”

“The SAFE Act is designed to protect our neighborhoods and families from dangerous sexually violent predators, perpetrators of some of the most horrendous and violent sex crimes,” Jones said in a statement about the bill.

The bill, SB 1074, would order officials to place public safety first when releasing an SVP, and require the Department of State Hospitals to approve any placements before their contractor, Liberty Healthcare, can sign leases.

Sexually violent predators, or SVPs, are people convicted of sexually violent crimes, and diagnosed with a mental disorder that puts them at high risk of re-offending. Their placement has sparked outcry in San Diego for years, as numerous sex offenders have been released to rural communities including Jacumba, Campo and Borrego Springs.

County Supervisor Calls Out State Farm Over Policy Cuts

San Diego County Supervisor Terra Lawson-Remer is calling on State Farm to find a workaround to its plans to cancel 72,000 policies throughout the state, including more than 2,000 in San Diego County.

Lawson-Remer represents part of the San Diego Coast, including Rancho Santa Fe, an affluent neighborhood where half of State Farm’s policies are on the chopping block.

She’ll ask the Board of Supervisors on Tuesday to demand that State Farm work with the state insurance commissioner to roll back planned cancellations, and to introduce transparency measures so homeowners get full protection at a fair price.

The Sacramento Report runs every Friday and is part of a partnership with CalMatters. Do you have tips, ideas or questions? Send them to me at

Deborah writes the Sacramento Report and covers San Diego and Inland Empire politics for Planetcob, in partnership with CalMatters. She formerly...

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  1. LOL. Kind of funny when Newsome isn't coordinated with the mayors. Hope it sinks Gloria.

    1. What does that mean? How do you make a profit on an unrealized gain? The answer is that you don't unless you sell and move or somehow borrow against the equity and invest it. For those that did the latter, good for them! Frankly there is very little benefit in the unrealized gain of a property unless you sell or take out risky equity loans to invest in something. Moreover, it isn't the fault of the homeowner that the government incentivized astronomical housing prices. Every homeowner pays property taxes based on the value that they purchased the property for.

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