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May Revision proposes no new general‑fund homelessness spending for 2025‑26; state and local grantees will still receive pipeline funding, officials say
Summary
The May Revision includes no new statewide general‑fund appropriation for homelessness programs in 2025‑26 but preserves previously appropriated awards and federal funds; administration officials said $760 million for HAP round 6 will be awarded starting this summer and emphasized existing pipeline funding and accountability work.
The Subcommittee discussed the administration’s May Revision homelessness proposals, which propose no new state general fund spending for homelessness in 2025‑26 while preserving previously appropriated awards and federal funds.
Department of Finance analyst Megan Tokonaga Block told the Subcommittee the May Revision proposes no new general fund homelessness programs in 2025‑26 and does not include reductions to current commitments in a way that would cut existing awards. The administration said it would still implement prior appropriations, including the previously authorized homeless housing assistance and prevention (HAP) funds. HCD staff noted the next HAP round (Round 6) is funded at $760 million and departments expect to award and distribute that money beginning this summer and into the fall.
The administration also proposes allocating $200 million in Proposition 36 (press materials refer to Prop 35 in discussion) funds over two years to flexible housing pools, rental assistance and housing supports for people with significant behavioral health needs — funds the administration said would increase throughput along the behavioral‑health continuum. The May Revision preserves $100 million for Encampment Resolution Fund grants appropriated in the 2024 budget act.
Panelists said much of the remaining homelessness funding now sits in regional and project pipelines and that many awardees have not yet expended prior allocations. HCD said there is more than $3.4 billion in active notices of funding availability across programs that have not yet been fully disbursed.
Equity and monitoring: Senators pressed HCD and Finance on how the state will track racial and geographic equity outcomes for homelessness investments, particularly if the administration does not add new state general‑fund dollars. HCD officials said the department builds equity metrics and system performance measures into each round of HAP and into grantee commitments; grantees submit racial equity plans and system performance data, and HCD runs technical assistance and oversight through a housing and homelessness accountability unit.
Legislative context: Several senators said the state must maintain predictable funding streams to allow jurisdictions to plan operations, hire staff and structure multi‑year contracts. Witnesses said many grantees can obligate multi‑year spending from single awards (for example using a five‑year grant term) and that the state’s current challenge is to encourage planning, accountability, and efficient spending to get outcomes.
Ending: The subcommittee left the homelessness item open. Members emphasized they expect continued negotiation on homelessness funding and accountability during budget deliberations.
