Governor Newsom’s 2026 Budget has New Homeless Agencies & Increases Homeless Spending: $37 Billion Wasn’t Enough?

California Governor Gavin Newsom vetoed two bills in 2024 that would have created actual transparency and auditing for the tens of billions that was spent and lost on homeless programs. One bill would have required annual reporting on state-run homelessness programs, and the other would have improved data collection and assessment of homelessness programs.

Gov. Gavin Newsom has spent $37 billion on homelessness since 2019, yet undercounts the homeless, according to the California Legislative Analyst’s Office 2025-2026 budget overview.

The state has also spent $900 million on “encampment resolution funding” – encampment removal and cleanup. Yet, homelessness is  growing.

In 2023, after Newsom administration representatives were skewered by lawmakers in an Assembly budget subcommittee on accountability and oversight hearing, Los Angeles Mayor Karen Bass, San Diego Mayor Todd Gloria, Sacramento Mayor Darrell Steinberg — all Democrats — and other leaders of California’s largest cities marched in lockstep to the state Capitol to lobby for more homelessness funding, the Los Angeles Times reported.

Mayor Gloria specifically asked for another $1 billion in homeless funding.

This request came the month after the California State Auditor released a report exposing that homelessness in the State has increased significantly during the last 10 years, to more than 181,000 individuals they could count, as of 2023.

Yet the auditor reported “Data show that nearly 316,000 individuals experiencing homelessness accessed housing and services in California’s 44 Continuum of Care Programs in 2022.^1“

So California is counting 181,000 homeless but serving 316,000? that doesn’t add up.

How high is the homeless count in 2026? According to the state’s California Interagency Council on Homelessness (Cal ICH), California’s 44 Continuum of Care Programs collectively provided services to about 337,000 people (unduplicated) who were experiencing homelessness during calendar year 2023, and about 310,000 people in 2024, although complete data for 2024 was not yet available as of the September 30, 2024 report.

Homelessness increased in California significantly since 2013 when Jerry Brown’ was governor, and far more significantly since 2019 under Gov. Gavin Newsom, particularly since none of the “mitigation” measures included sobriety or treatment – it was all about housing.

The auditor’s report, in 2023, focused primarily on San Diego’s and San Jose’s homeless programs and spending. Notably, the Auditor found neither San José nor San Diego consistently evaluated the effectiveness of its homelessness programs, but wanted more money.

This was during the Biden administration, which was sending HUD funding to California as if they were printing the money. “The State and HUD provide funding through a variety of programs to Continuum of Care Programs and the entities within Continuum of Care Programs, such as counties, cities, and nonprofits,” the Auditor said.

In 2021, then-State Auditor Elaine Howle released a rather scathing audit of the management or mismanagement of Homelessness in California.

In a letter to the Governor, President pro Tempore of the Senate, and Speaker of the Assembly, Howle said “At least nine state agencies administer and oversee 41 different programs that provide funding to mitigate homelessness, yet no single entity oversees the State’s efforts or is responsible for developing a statewide strategic plan.”

The state’s plan to mitigate homelessness is not designed to achieve this, as the audit shows. Because if the 9 agencies and 41 different programs were, they would no longer be needed, the federal and state funding would dry up, and public employee union jobs would be lost. In California, no program ever sunsets.

And here we are in 2026, with $37 billion disappeared under the “homeless” spending umbrella, and we have over 300,000 homeless persons availing themselves of occasional services with no sobriety or treatment requirements.

So what does the governor and Legislature do? An “Agency Reorganization,” which is secret government code for how to spend even more taxpayer funding by creating new agencies and jobs.

The LAO says during 2025-26 budget deliberations, the Newsom administration pursued a reorganization of the Business, Consumer Services, and Housing (BCSH) Agency through a statutorily defined executive branch reorganization process – meaning Governor Newsom ordered it. In July 2025, the Legislature completed its review of the administration’s plan and provided funding for the reorganization.

Of course they did. So the homeless funding gravy train will continue, because as we remember, Gov. Newsom, who has presided over the exponential growth of hundreds of thousands of homeless drug addicts living on California streets, magically cleaned up San Francisco ahead of the arrival of Chinese President Xi Jinping and the Asian-Pacific Economic Cooperation (APEC) Summit. The streets were suddenly shiny clean, devoid of the usual tents and encampments, piles of trash and filth, human excrement, and drug-addled zombies.

Homeless spending is fraud. Heads need to roll and prosecutions need to commence.

The LAO says the 2025-26 budget provides an additional $4.0 million to $6.2 million as part of a reorganization of BCSH. And the budget package provides new funding and newly created positions as part of Housing and Homelessness Reorganization.

Yes, Gov. Newsom is expanding the size, scope and funding of the state’s homeless program funding, and the Legislature is going along with it.

Under the reorganization, which will go into full effect on July 1, 2026, Business, Consumer Services, and Housing Agency will split into two agencies: the California Housing and Homelessness Agency (CHHA) and the Business and Consumer Services Agency.

Figure 1 below shows which entities will become part of CHHA. The funding provided in 2025-26 will be used to begin standing up the new agencies and initiate the transition.

The budget provides the Business, Consumer Services, and Housing Agency with $23 million in 2025-26.

Here’s where the rubber meets the road – The LAO reports:

More Funding for Encampment Resolution Funding (ERF) Grants. The 2025-26 Budget Act appropriates $100 million. With this appropriation, General Fund support for this initiative since 2021-22 totals nearly $1 billion.

Plans for Additional Funding for Homeless Housing, Assistance, and Prevention (HHAP) Program. Chapter 24 of 2025 (SB 131, Committee on Budget and Fiscal Review) provides $500 million.

Additional Funding for California Dream for All down payment assistance program for first-time homebuyers Program. The budget appropriates $300 million.

Funding for Affordable Housing. The budget provides $120 million, with 10 percent set aside for California tribes.

Another Round of Low-Income Housing Tax Credits. The budget authorizes $500 million for the state Low-Income Housing Tax Credit (LIHTC) program. (This amount is in addition to about $130 million in statutorily required state tax credits for the program in 2025-26.)

Reverts a Total of $38 Million in Unspent Housing Funds to the general fund. The budget reverts these funds, which were originally appropriated in a prior fiscal year but had not yet been spent on projects, as a General Fund solution.

Gov. Gavin Newsom tries to deflect from his failures and claims that local governments increased homelessness in California.

Balderdash. Newsom has a long sordid history, going back to when he was San Francisco’s mayor, of enabling drug addiction, increasing crime, and increasing homelessness, despite promises to eradicate all of it within 10 years. As governor, he spent $37 billion, only to increase homelessness by 24%, and raise violent crime to 31% over national average.

337,000 homeless drug addicts living on California streets is the size of  California’s 11th largest city. That’s more than the entire populations of Stockton, Riverside, Irvine, Santa Ana, Pasadena, Rancho Cucamonga, East LA, and California’s 1,566 other cities, and nearly twice the size of Huntington Beach, Glendale, Santa Rosa and Elk Grove.

As the Globe reported in December 2025, Gavin is attempting to clean up his real record, which is lengthy and dismal, but in reality, Gavin Newsom is the First Governor to Make Homelessness a Way of Life.

Gavin Newsom is the First Governor to Make Homelessness a Way of Life