LAO Issues Reports on Governor’s Proposed Investments in Homelessness, Climate Change
This week, the Legislative Analyst’s Office (LAO) issued two reports related to Governor Gavin Newsom’s proposed investments included in the 2020-21 proposed budget. The reports play a key role as the Legislature begins holding budget committee hearings over the coming weeks and months to examine proposed investments across various program areas and topics. The LAO’s reports this week assess the Governor’s proposed investments in homelessness and climate change.
In issuing its report, the LAO indicated its intent to provide the Legislature context for the state’s homelessness crisis, an update on recent state efforts to address homelessness, an assessment of the Governor’s 2020-21 homelessness plan, and a proposed framework to assist the Legislature in developing its own plan and funding allocations as an alternative to the Governor’s proposal.
The LAO discusses the state’s current homelessness crisis and estimates 151,000 people are currently experiencing homelessness, more than any other state in the nation. Despite significant investments from state and local governments, California saw a 16 percent increase in its homeless population from 2018 to 2019. The LAO discusses the important role of local governments in providing services to individuals experiencing homelessness and provides a historical context around how funds have been spent by state and local governments to address the issue.
As proposed in the Governor’s 2020-21 budget, $750 million is slated to establish the California Access to Housing Services Fund (CAAHS) within the Department of Social Services and $695 million is slated to reform the Medi-Cal system through the Medi-Cal Healthier California for All (CalAIM) initiative. In assessing the Governor’s proposed investments, the LAO finds that the Governor’s proposals fall short of articulating a clear strategy for curbing homelessness in California and raise significant questions for the Legislature to consider during the budget process. Furthermore, the LAO urges the Legislature to develop a comprehensive strategy for addressing homelessness through a framework that identifies goals, identifies solutions that align with goals, sets clear state and local responsibilities, identifies a state governance structure, establishes a funding strategy, and develops rigorous oversight mechanisms. The LAO contends that this framework, established by the Legislature, would ensure the state’s resources are used in a way that results in meaningful reductions in homelessness.
The LAO sets forth a series of recommended one-time actions if the Legislature is unable to develop over the next few months a clear and comprehensive strategic plan to address homelessness. These alternative efforts largely focus on supporting local initiatives to address homelessness, including providing grants to local governments, while the Legislature has time to develop its homelessness plan.
The full LAO report on proposed homelessness investments is available here.
Climate Change Investments
The LAO also issued a report examining the Governor’s proposed investments related to climate change. The four main proposals evaluated by the LAO include a $965 million cap-and-trade expenditure plan, $25 million for expanded climate adaptation research and technical assistance, $250 million for a new climate catalyst loan fund, and a $4.8 billion climate bond. The report issued by the LAO sets forth a series of key issues for the Legislature to consider, including thinking broadly about its climate change-related priorities, General Fund commitments, Greenhouse Gas Reduction Fund dollars, and the use of nonfinancial tools and regulations to achieve its climate goals.
The full LAO report on proposed climate change investments is available here.