By David M. Greenwald
Sacramento, CA – Governor Newsom unveiled a $297 budget that accounts for a $22.5 billion shortfall caused by anticipated revenue declines. Many praised the work of the legislature for anticipating the shortfall and not needing to cut any services or new taxes.
“With our state and nation facing economic headwinds, this budget keeps the state on solid economic footing while continuing to invest in Californians—including transformative funding to deliver on universal preschool, expand health care access to all and protect our communities,” said Governor Newsom. “In partnership with the Legislature, we’ll continue to prioritize the issues that matter most to Californians while building a strong fiscal foundation for the state’s future.”
The governor said, “Despite the slowdown impacting the state’s economic and revenue outlook this year, the state’s commitment to building reserves and budget resiliency over the last several years enables the 2023-24 state budget proposal to sustain key investments reflecting the values and priorities of Californians.
“This includes major funding to transform our education system, address the homelessness crisis and housing affordability, increase health care access, tackle the climate crisis, keep Californians safe and expand economic development and growth across the state.”
Here are some of the key homeless expenditures:
- Homelessness Funding: Maintains $3.4 billion to address homelessness as committed in prior budgets. This includes $400 million for the third round of encampment resolution grants and $1 billion for the fifth round of Homeless Housing, Assistance and Prevention (HHAP) grants.
- Homelessness Funding Accountability and Transparency: Proposes statutory changes to the HHAP program to prioritize spending on activities such as encampment resolution, Homekey operating sustainability, and Community Assistance, Recovery and Empowerment (CARE) Act housing supports. This focus may also be accompanied by expanded housing streamlining provisions.
- Homelessness Funding Eligibility: Seeks to condition eligibility for any future homeless-related grants and competitive programs through the Business, Consumer Services and Housing Agency and the Health and Human Services Agency, on compliance with state housing law.
The governor is also putting money into the CARE ACT: “Maintains $88.3 million for county start-up and state implementation of the CARE Act and proposes additional funding for local assistance ongoing costs, including $16.5 million in 2023-24, $66.5 million in 2024-25, $108.5 million in 2025-26, and annually thereafter to support estimated county behavioral health department costs for the CARE Act.”
On Housing and Economic Development:
- Dream For All Program: The 2022 Budget Act included $500 million one-time General Fund to the California Housing Finance Agency to provide shared-appreciation loans to help low- and moderate-income first-time homebuyers achieve homeownership. The Budget reduces this to $300 million General Fund in 2023-24.
- CalHome Program: The 2022 Budget Act included $100 million one-time General Fund for 2023-24 to the Department of Housing and Community Development to provide local agencies and nonprofits with grants to assist low- and very-low-income first-time homebuyers with housing assistance, counseling, and technical assistance. The budget proposes to remove this funding.
- Accessory Dwelling Unit Program: The 2022 Budget Act included $50 million one-time General Fund for the California Housing Finance Agency’s Accessory Dwelling Unit program. The budget proposes to remove this funding.
The League of California Cities took a mixed view of the proposal.
“The Governor’s proposed 2023-24 State Budget honors funding commitments to local governments made in the 2022 Budget that bolster essential local programs and support our most vulnerable residents,” said Carolyn Coleman, Executive Director and CEO of the League.
The League believes that, in the current landscape, “the state needs to double down on ongoing investments to address homelessness.”
Coleman explained, “Make no mistake: Funding included in previous state budgets to reduce and prevent homelessness is welcomed. But one-time investments will not solve this crisis.”
She added, “We need ongoing state funding and a coordinated approach with clearly defined roles and responsibilities for all levels of government that supports long-term solutions. With half of the entire country’s unsheltered population residing in our state, our unsheltered residents deserve nothing less, and the scale of the crisis requires it.”