Home>Articles>Gov. Newsom and Legislature Each Want Additional $200M For Homeless in a Tit-for-Tat Over Pet Projects

Gov. Gavin Newsom. (Photo: Kevin Sanders for California Globe)

Gov. Newsom and Legislature Each Want Additional $200M For Homeless in a Tit-for-Tat Over Pet Projects

Legislative Analyst recommended rejecting requests, and warned of ‘concerning precedent’

By Katy Grimes, October 8, 2020 4:15 pm

At the end of September, Gov. Gavin Newsom asked the Joint Legislative Budget Committee for another $200 million for Project Roomkey’s big brother, Project Homekey, referring it as COVID-related funding.

The $200 million would come from “Coronavirus Relief Funds” and be directed to Project Homekey.

Congress allocated $9.5 billion in Coronavirus Relief Funds to California.

California legislators have made no secret of the fact they are not happy with how the governor had handled the statewide lockdown, COVID-related spending and so many Executive Orders as to be legislating from the governor’s office.

Instead of denying the governor’s request, they asked for $200 million from Coronavirus Relief Funds for their own pet projects under the guise of the necessity “to enact the housing and homelessness provisions of the Budget Act of 2020.”

Food insecurity, child care, rent assistance, and free diapers, are some of the needs cited in a letter (below) from Joint Legislative Budget Committee Chairwoman Sen. Holly Mitchell to the governor and his finance department in response to his request.

Senator Holly Mitchell. (Kevin Sanders for California Globe)

Project Homekey

Project Homekey, “necessary to enact the housing and homelessness provisions of the Budget Act of 2020,” was created out of an empty bill set aside until there was a cause needing a law. AB 83, the empty bill, was amended to include the language for Project Homekey, passed by the Legislature, and signed into law by the governor without ever having a public hearing.

According to the governor’s office, Project Homekey is “California’s nation-leading $600 million program to purchase and rehabilitate housing – including hotels, motels, vacant apartment buildings and other properties – and convert them into permanent, long-term housing for people experiencing or at risk of experiencing homelessness.”

“Nearly $76.5 million was awarded by the Department of Housing and Community Development (HCD), which administers Homekey, for 10 projects in seven California communities totaling 579 units,” Gov. Newsom announced September 16th.

According to the LAO, in the state budget, the Legislature already allocated  through the budget $2.7 billion in Coronavirus Relief Funds to the state, to offset General Fund costs associated with the pandemic, and $550 million to the Department of Housing and Community Development for Project Homekey.

The Legislative Analyst’s Office said this additional funding for Project Homekey was a very bad idea, and warned against it – in addition to saying it sets a bad precedence:

“Essentially, the administration proposes to unilaterally appropriate General Fund money—on a discretionary basis—with a JLBC notification. Yet the State Constitution entrusts the legislative branch with the power of appropriation,” the LAO wrote in a letter (below) to the JLBC committee.

California Globe learned that while JLBC Committee Chairwoman Mitchell has the full authority to sign off on the funding request, even after requesting input from committee members, the LAO and minority party warnings were ignored.

Mitchell granted the Governor’s request for an additional $200 million for Project Homekey.

The clincher is that under federal law and U.S. Treasury policy, if any states’ Coronavirus Relief Funds funds are unspent at the end of 2020, they must revert back to the U.S. Treasury, the LAO reported. “The budget authorized the Department of Finance to reallocate the funding to other allowable activities if Coronavirus Relief Funds funds are not spent before September 1, 2020. The intent of Section 11.90 was to prevent the state from reverting CRF monies back to the U.S. Treasury if, for example, one of the intended offsets or recipients did not have the capacity to spend all of its allocated CRF monies before the deadline.”

The LAO was concerned that with the governor’s proposed $200 million reallocation, it would reduce the General Fund offset for pandemic-related costs from $2.7 billion to $2.5 billion. And Coronavirus Relief Funds funding for Project Homekey would increase from $550 million ($600 million total funds) to $750 million ($800 million total funds).

As a result, General Fund costs would be $200 million higher than the enacted 2020-21 Budget Act absent additional reallocations in the future.

The Department of Finance approved the additional $200 million Sen. Holly Mitchell requested (letter below), and Sen. Mitchell and her Joint Legislative Budget Committee approved the additional $200 million Gov. Gavin Newsom requested, despite the warnings of the Legislative Analyst’s Office.

 

JLBC committee ltr to Newsom

 

LAO ltr To JLBC

 

DOF response to JLBC
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10 thoughts on “Gov. Newsom and Legislature Each Want Additional $200M For Homeless in a Tit-for-Tat Over Pet Projects

  1. Disgusting. This is nothing but a slush fund. These people will continue to do NOTHING to alleviate the homeless/vagrant nightmare, except to the extent they can make it worse, then pronounce the areas “blighted,” then buy the land for a song along with their crony developers, and make acres and acres of cash off of it. Money that will go into their own pockets. Look at the record: There has purposely been NO understanding by these politicians and bureaucrats of the nature of the population affected — mentally ill and drug addicted — they have purposely turned a blind eye because it BENEFITS THEM to do so.
    To see just one blatant eyesore of an example about what these Dems’ intentions are, read Ed Ring’s “Gathering for the Feast at the Hotel California.”

  2. The homeless (so called) issue has become the ultimate black hole for government waste and fraud. A Democrat dream come true.

    1. CW: YES. I think many many Californians (and other West-Coasters) understand about this now, with the help of Katy Grimes and Ed Ring and a number of other reporters here at the Globe, but the rest of the country has not caught onto it yet. At all. The bad news for them is that they WILL start understanding this stuff in a hurry if the gullible — and there are plenty even in the “heartland,” too — continue to vote for Democrats, thinking they are being “nice” and not “mean” like Orange Man Bad. Aaaaahhhh!

      1. The more money they throw at it, the worse it gets. The drug free for all is accelerating the increase in “homeless people”. Small towns are starting to look like San Francisco.

        1. You’re so right about the drug free for all. AND about the small towns.
          Hearing on the street here that people in the SoCal valley suburbs (really off the beaten track but still part of City of L.A.; there’s your answer) are starting to see the mess spread to them and cannot believe it. I guess we are all Skid Row now. It’s not going to get better on its own, DUH, and we’re actually attracting people from all over the country to California because of this, aren’t we.

          1. And he is taking money away from Public Safety, all these fires and the loss of lives and destruction of property. The governor and his cronies could care less.

  3. And he is taking money away from Public Safety, all these fires and the loss of lives and destruction of property. The governor and his cronies could care less.

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