“Unacceptable” State Budget Proposal Falls Short on Homelessness, Prop 36

California lawmakers are set to vote on a budget plan as soon as Friday that would intensify the state’s homelessness crisis and thwart the full implementation of voter-approved Proposition 36. 

The $325 billion spending plan does not include any guaranteed funding for the Homeless Housing and Prevention (HHAP) program — the key funding source for county and city efforts to reduce homelessness. And its limited Prop 36 funding prevents counties from fully implementing what voters have approved 

“We recognize many lawmakers — in both houses and on both sides of the aisle — who worked to put homelessness and Proposition 36 funding in the budget after the May Revision left both out entirely,” CSAC CEO Graham Knaus said in a statement issued earlier this week. “Californians have been clear about their priorities, and they won’t accept half measures. Without sufficient and reliable funding, the state’s homelessness approach and implementation of Prop 36 will fail.” 

ACTION ALERT: Contact your lawmakers to share how the lack of sufficient HHAP and Prop 36 funding will affect your county. 

On Monday, the Senate and Assembly released their version of the 2025-26 state budget. The Legislature’s Joint Budget Plan reflects the Legislature’s response to the Governor’s 2025-26 May Revision Budget proposal and represents their priorities for negotiation with the Administration on a final state spending plan.  

Unfortunately, the Legislature’s plan zeroes out HHAP funding in 2025-26. It states the Legislature’s “intent” to appropriate $500 million in HHAP funding in the 2026-27 fiscal year, but counties cannot budget based on legislative intent. And even if the $500 million appropriation does eventually get approved — far from guaranteed in the current economic and political climate — that would still only be half of the last four HHAP rounds.   

This continues the unreliable, piecemeal approach to addressing the most intractable crisis of our generation. And it doesn’t lower the expectations or accountability measures placed on local governments. 

“This isn’t Do more with less,” Knaus said. “It’s Do more with nothing.” 

The budget plan’s Proposition 36 proposal includes a one-time appropriation of $50 million for county behavioral health departments and $15 million for county public defenders. That combined $65 million falls far short of the $250 million counties argue is required for full implementation. It also has $15 million in one-time money for county probation departments, but it cuts $20 million in ongoing funding for pretrial services. 

“Counties can’t implement Prop 36 without the full support of the state,” Knaus said. “This isn’t nearly enough.” 

CSAC submitted a letter to legislative leadership this week stating that this approach is “unacceptable.”  

Other legislative budgetary priorities most notable for county governments include the following:  

• Up to $1 billion for emergency relief for local governments in Los Angeles County, in the form of state General Fund loan authority for recovery following the January 2025 wildfires 

• $118.1 million one-time to backfill ERAF/VLF for affected counties.  

• $100 million to save critical victim services statewide due to the anticipated shortfall in the federal Victims of Crime Act funding.  

The Work is Not Over  

Budget negotiations between the Governor and legislative leadership are ongoing. The Administration and the Legislature are reconciling the differences between the Governor’s May Revision budget proposal and the Legislature’s Joint Budget Plan. CSAC legislative advocates testified at Senate and Assembly budget hearings this week. Our focus remains on ensuring that the state’s budget plan is fiscally responsible while equipping local leaders with the tools, funding, and flexibility needed to strengthen the social safety net and public safety.  

The earliest the Legislature can vote on their version of the budget is Friday, June 13. However, the vote could occur over the weekend as the constitutional deadline to pass a balanced budget each year is June 15.  

What happens next?  Opportunities Remain, Although Uncertain  

The budget development process may not necessarily end on June 15. (Read more in our article: Five Things You Should Know About the State Budget) Some years, the Legislature will meet the June 15 constitutional deadline by passing a Joint Legislative Budget Plan knowing full well the governor will not sign it. In other words, the Joint Legislative Budget Plan may act as a placeholder budget act to comply with the June 15 constitutional deadline and allow the Legislature and the Administration more time to negotiate the final spending plan. 

Please do not hesitate to contact CSAC legislative affairs staff with questions about specific policy areas.