Homeless funding could be cut in Gavin Newsom’s proposal. How would it affect Sacramento?

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Gov. Gavin Newsom’s proposed cuts to homeless funding could mean the Sacramento City Council could next year decide to close shelters.

Amid a looming state deficit, Newsom earlier this month proposed phasing out a program that funnels big checks to cities across California to help them get the homeless off the streets.

The Homeless Housing Assistance and Prevention program, or HHAP, has given tens of millions to the city of Sacramento since 2019. At that time, the city had less than 100 shelter beds. Thanks largely to the HHAP money, it now has 1,350. It’s opened large shelters on X Street, in Meadowview, on Auburn Boulevard and on Roseville Road.

The program will give the city of Sacramento $27 million for the fiscal year that starts July 1 — over half the roughly $43 million in total the city spends on homelessness each year.

The city of Sacramento is already facing a $66 million budget, forcing the council to make tough decisions about raising parking fees and cutting free programs starting July 1. In future years, if HHAP is cut, the city’s existing deficit will grow and the council will need to look at making deeper cuts to programs. This year the council is able to close the budget gap without closing shelters of laying off employees.

The city expects without HHAP it will face a $77 million deficit for fiscal year that starts July 1, 2025, city spokesmanTim Swanson said. That could cause the council to close shelter beds, even though there’s a waiting list of over 2,400 and they are getting people housed.

The city’s shelter at X Street and Alhambra, since opening in 2021, has sheltered 986 people, according to Sacramento Housing and Redevelopment Agency data. Of those, 342 have found housing, including 186 in permanent housing.

That shelter has been expensive for the city to run — about $10 million a year for 100 beds. Unlike the county and state, the city is not a social service agency. So it contracts with organizations such as Volunteers of America to run the shelter, provide meals, provide mental health and medical care, and provide help finding permanent housing. The city’s Meadowview shelter for women and children also costs the city about the same per year.

The county also operates about 1,000 shelter beds, mostly tiny home villages in south Sacramento. But it receives less money in HHAP than the city — $8.5 million for the fiscal year that starts July 1 — and is not facing a deficit. If the state cuts HHAP the county shelter funding won’t be in jeopardy until the fiscal year that starts July 1, 2027, said county spokeswoman Janna Haynes.

A different recent decision by Newsom may help the city budget. He last month announced state workers must return to the office for at least two days a week, ending the possibility of full-time telework that began during COVID. City officials have said the city is in a deficit partly due to parking revenue declining after thousands of state workers stopped working in downtown office buildings.