Gov. Gavin Newsom talks to reporters at the site of a homeless encampment in downtown San Diego on Jan. 12, 2022. / Photo by Adriana Heldiz

Sacramento Report: Newsom Tells Counties ‘No More’ On Homelessness Funding | Voice of San Diego

Accountability Debate Obscures Structural Flaws

Governor blames counties for program failures, but appointed officials who run programs don't answer to voters

BLUF (Bottom Line Up Front): Governor Gavin Newsom's proposed 50% cut to California's primary homelessness grant program comes amid disputes over county accountability, with experts warning the reduction could reverse recent progress and lead to increased encampments in public spaces. However, the accountability debate obscures a structural flaw: the appointed county officials who actually run homelessness programs don't answer directly to voters, making meaningful accountability nearly impossible under current governance structures.

SACRAMENTO—California Governor Gavin Newsom unveiled a preliminary budget Friday that cuts the state's flagship homelessness program in half, from $1 billion to $500 million, setting up a clash with mayors and advocates who warn the reduction will push more people onto streets and into parks just as the state begins showing signs of progress.

The proposed 2026-27 budget slashes the Homelessness, Housing, Assistance and Prevention (HHAP) grant program to its lowest level since 2019, representing a 56% cut to overall housing and homelessness programs compared to this year's budget.

The announcement follows Newsom's State of the State address Thursday, in which he declared "no more excuses" and criticized counties for failing to effectively deploy mental health resources despite years of state funding.

But the escalating blame game between the governor, mayors, and county officials obscures a fundamental governance problem that neither side acknowledges: California's county government structure makes it nearly impossible to hold anyone accountable when homelessness programs fail.

A Contentious Cut Amid Signs of Progress

The reduction comes as California reported its first statewide decline in homelessness in years. According to the Regional Task Force on Homelessness, San Diego's homeless population dropped 14% in the city and 7% countywide between 2024 and 2025—a reduction Mayor Todd Gloria attributes directly to HHAP funding.

"There's consensus amongst mayors that we need that, and I think what's happening at the federal level makes that even more important," Gloria told Voice of San Diego. "I think they get it, but I don't know how this gets to be a priority."

Gloria has received nearly $100 million from HHAP since 2019, with $24 million in the latest 2024 round. The city has used grants to fund thousands of shelter beds and temporary housing facilities while pursuing an aggressive encampment removal strategy.

The governor's finance department projects a $3 billion deficit with no new social service expansions. Newsom, who faced a $12 billion budget deficit last year, must balance priorities amid steep federal funding cuts expected to affect programs including Medi-Cal.

Graham Knaus, CEO of the California State Association of Counties, expressed hope that full $1 billion funding would be restored as negotiations continue through June, when lawmakers face a deadline to finalize the budget.

The Accountability Paradox: Nobody's Really in Charge

At the heart of California's homelessness funding debate lies a critical structural flaw that undermines all the political finger-pointing: the officials who actually implement county homelessness programs are appointed, not elected.

Unlike city mayors who face voters directly, county administrative officers (CAOs)—the top officials responsible for managing mental health and homelessness services—are appointed by county boards of supervisors. This creates what governance experts call an "accountability gap."

In San Diego County, the Board of Supervisors appointed Ebony Shelton as Chief Administrative Officer in June 2024. Shelton oversees more than 20,000 county employees serving 3.3 million people, but she was selected through a closed-door process and answers exclusively to the five-member Board of Supervisors—not directly to voters.

The same structure exists across California. In Los Angeles County, the appointed CAO manages a nearly $50 billion budget—larger than most U.S. states—but faces no direct electoral accountability.

When homelessness programs fail or funds go unspent, who bears responsibility? The appointed CAO who lacks direct electoral accountability? The elected supervisors who set policy but don't manage daily operations? Or county department heads who run specific programs?

The answer is unclear—and that's precisely the problem.

Why County Government Is Different From City Government

County boards of supervisors wield extraordinary power with limited checks and balances. In Los Angeles County, this concentration of authority in five individuals has earned the board the nickname "the five little kings."

Each LA County supervisor represents approximately 2 million people—larger than the populations of 15 U.S. states—and collectively the board controls:

Annual budget allocation exceeding $50 billion
Appointment and removal of the CAO
Policy direction for all county departments
Mental health and substance abuse service delivery
Legislative, executive, and quasi-judicial functions

San Diego County supervisors exercise similar power, with each representing roughly 660,000 people and collectively controlling a budget exceeding $7 billion.

Supervisors are elected—but they function as both legislative and executive authority, creating confusion about where responsibility lies when programs fail. And critically, they don't directly manage the programs they're blamed for mismanaging.

Cities operate fundamentally differently. San Diego Mayor Gloria is directly elected and exercises executive authority over city departments. He appoints department heads, prepares budgets, and faces direct electoral consequences for visible policy failures.

If Gloria's homelessness programs fail, voters know exactly who to hold accountable: the mayor. This creates strong political incentives for visible action—hence Gloria's aggressive encampment clearing and shelter expansion.

Counties lack this clear accountability structure. Responsibility is so diffused across appointed and elected officials that meaningful accountability becomes nearly impossible.

The Circular Blame Game Intensifies

This structural reality fuels an escalating blame game between state, county, and city officials.

Governor Newsom accuses counties of maintaining "unexpended balances" and failing to provide adequate mental health services. He's proposed new accountability measures including standardized metrics, quarterly reporting, potential funding clawbacks, and performance-based allocations.

Mayor Gloria echoes this criticism. "A lot of them have unexpended balances," Gloria said broadly of counties struggling with homelessness. "My city has spent my money."

But when Gloria criticizes "the county," who specifically is he blaming?

CAO Ebony Shelton, who was appointed in June 2024—well after most funding decisions in question?
The Board of Supervisors, who set policy but don't manage daily operations?
The County's Behavioral Health Services Department, led by appointed directors?
Previous CAO Helen Robbins-Meyer, who retired in January 2024 after serving since 2012?

When pressed, elected supervisors can blame appointed CAOs for implementation failures. CAOs can point to board policy directives or inadequate resources. Department heads can cite bureaucratic barriers or state regulatory requirements. And the governor can criticize "counties" without specifying whether he means appointed CAOs, elected supervisors, or specific departments.

The public struggles to determine who actually bears responsibility—and that makes accountability debates largely rhetorical rather than substantive.

County Performance: Misappropriation or Mismanagement?

Beyond structural accountability problems, real questions exist about county performance in deploying homelessness funding.

Under California law, counties bear legal responsibility for providing mental health and substance abuse services through various funding streams including HHAP grants. Cities control shelter beds, housing placement, and street outreach. This division enables the circular blame game.

Los Angeles County: Delays Without Diversion

Los Angeles County, home to over 75,000 homeless individuals—roughly 40% of California's total—faces the most intense scrutiny.

A 2024 audit by the Los Angeles County Auditor-Controller found significant delays in deploying homelessness funds, with some programs taking 18-24 months from funding approval to service delivery. The audit identified administrative bottlenecks, inadequate tracking systems, and poor coordination between county departments.

However, the audit also documented that most delays stemmed from regulatory compliance requirements, not misappropriation. Funds were not diverted to other purposes but rather remained in accounts while navigating procurement rules, environmental reviews, and labor agreements.

LA County Supervisor Lindsey Horvath defended the county's efforts: "We're not failing to spend the money. We're failing to acknowledge that the money provided is insufficient for the scale of crisis we face."

San Diego County: Structural Barriers to Rapid Deployment

San Diego County received significant HHAP allocations intended specifically for mental health services, substance abuse treatment, and coordinated entry systems. County officials argue they face structural barriers preventing rapid deployment:

Lengthy hiring processes for licensed clinical staff in a competitive market
Facility construction or renovation subject to environmental review
Contracting procedures for nonprofit service providers
Time to establish clinical protocols and quality assurance systems
Severe shortage of psychiatric beds, licensed therapists, and addiction treatment specialists

Neither the governor's office nor county officials have publicly released detailed accounting of how much HHAP money allocated for mental health services remains unspent, nor specific metrics on how many homeless individuals received county-funded treatment.

Bay Area Counties: Mixed Results

In the San Francisco Bay Area, outcomes vary dramatically:

San Francisco County, operating as both city and county with an elected mayor as chief executive, has spent HHAP dollars relatively quickly but faces criticism for limited measurable impact. Despite spending over $1 billion annually on homelessness, the street population remains stubbornly high.

Alameda County has documented better expenditure rates but struggles with outcomes. A 2024 county report showed mental health services reached thousands of homeless individuals, but only a small fraction successfully transitioned to permanent housing.

Santa Clara County has been praised for more aggressive spending and clearer outcome metrics, showing higher permanent housing placement rates. However, critics note the county benefits from Silicon Valley's tax base and nonprofit infrastructure that smaller counties lack.

The Evidence on Misappropriation vs. Mismanagement

Available evidence suggests that outright misappropriation—diverting homelessness funds to unrelated county expenses—is rare and would violate state law.

What appears more common is ineffective deployment:

Funds remaining unspent due to bureaucratic delays
Money spent on administrative overhead rather than direct services
Contracts with providers delivering limited measurable outcomes
Lack of coordination between county mental health and city housing programs
Inadequate tracking systems to demonstrate results

A 2024 state audit of HHAP spending across multiple counties found that while funds were generally spent on allowable purposes, the state lacked standardized metrics to evaluate effectiveness. Counties reported vastly different outcome measures, making comparison impossible.

The audit also found that some counties maintained large reserve balances—not through incompetence, but because matching requirements, procurement timelines, and facility construction schedules meant funds couldn't be deployed immediately.

Structural Barriers Beyond County Control

Several systemic factors limit county ability to quickly deploy mental health funding:

Workforce Shortages: California faces a critical shortage of licensed mental health professionals. Counties compete with private sector employers offering higher salaries, making it difficult to staff expanded programs.

Regulatory Requirements: State and federal regulations require environmental review, prevailing wage compliance, and competitive bidding—processes adding 12-18 months before services begin.

Facility Limitations: Mental health treatment requires clinical space. Counties must secure facilities, often requiring construction or renovation.

Coordinated Entry Barriers: State policy requires "coordinated entry" systems where individuals are assessed and referred. Building these systems requires extensive inter-agency cooperation and data infrastructure.

Proposition 1 Timeline: The 2024 Proposition 1 bond provides $6.38 billion for mental health facilities, but construction timelines mean beds won't be available for years—creating a gap between funding authorization and service delivery.

Los Angeles Voters Recognize the Accountability Problem

In November 2024, Los Angeles County voters approved Measure G, which explicitly recognizes that current county governance structures create insufficient accountability.

Measure G requires the county to:

Create an independent ethics commission by 2026
Hold a direct election for a county executive by 2028 (replacing the appointed CAO position)
Expand the Board of Supervisors from five to nine members by 2032

The elected county executive will have broad mayor-like powers: supervising department heads, preparing the budget, and exercising veto power over board resolutions. This official will answer directly to voters, not just the Board of Supervisors.

This reform explicitly acknowledges that the current structure—where appointed CAOs answer only to supervisors, not voters—creates an accountability gap that undermines effective governance.

But the reform won't take effect until 2028, and most California counties—including San Diego—have no similar plans. San Diego County continues operating under appointed CAO leadership with no current movement to create an elected executive position.

Implications for Homelessness Policy

The structural accountability gap has profound implications for California's homelessness response:

Misaligned Incentives: City mayors face strong political pressure to show visible results because failure is immediately attributed to them. County supervisors can more easily deflect criticism to appointed administrators.

Coordination Challenges: The separation between elected city mayors controlling shelters and appointed county CAOs managing mental health services creates inherent coordination problems with no clear resolution mechanism.

Blame-Shifting Enables Inaction: Both mayors and governors can blame "counties" abstractly, while counties can point to mayors or the state—making accountability debates rhetorical rather than substantive.

Budget Politics: When counties maintain unexpended balances, determining whether this reflects CAO-level mismanagement, supervisor-level policy failure, or structural barriers beyond anyone's control becomes nearly impossible.

Reform Resistance: Appointed CAOs have limited political capital to push controversial reforms because they lack direct electoral mandates. Elected supervisors can claim they've directed changes while pointing to appointed staff when implementation falters.

Impact on Public Spaces: Where Will People Go?

Regardless of who bears responsibility, homelessness advocates and local officials warn that reduced funding could reverse recent gains and push more people into parks, nature reserves, and recreational areas.

San Diego's recent success has relied heavily on HHAP dollars. The city has aggressively cleared encampments while simultaneously expanding shelter capacity—a two-pronged approach that experts say requires sustained funding. Without adequate resources for shelters and services, cleared encampments typically reform within weeks or months.

Research from the University of California suggests that funding cuts disproportionately affect the most vulnerable populations—families with children, veterans, and those with serious mental illness—groups most likely to camp in public spaces when shelter beds are unavailable.

The National Alliance to End Homelessness has documented that communities experiencing funding reductions typically see encampments migrate to parks, greenbelts, and recreation areas, where enforcement is more difficult and public health risks escalate.

If county mental health services contract due to funding cuts, individuals with untreated psychiatric conditions and substance abuse disorders will likely become more visible in public spaces, creating safety concerns and political pressure for enforcement-only approaches that don't address underlying needs.

Jennifer Friedenbach, executive director of the Coalition on Homelessness in San Francisco, argues the governor is "scapegoating counties to avoid responsibility for decades of state housing policy failure."

The fundamental issue that neither the governor nor county officials adequately address: California has built far less affordable housing than needed, creating homelessness faster than mental health services can address it—regardless of how efficiently counties deploy funding.

Federal Uncertainty Compounds State Cuts

The state budget challenges arrive as federal funding faces potential cuts under the Trump administration. Newsom's budget acknowledges expected reductions to key programs including Medi-Cal, adding pressure to already-strained state resources.

"What's happening at the federal level makes [state funding] even more important," Gloria said, noting the compounding effect of simultaneous federal and state reductions.

San Diego faces a $110 million municipal deficit next year, down from $300 million in the current fiscal year. Gloria is expected to address budget balancing measures in his State of the City address next Thursday, likely including continued cost-cutting and new revenue generation through measures like the controversial Balboa Park parking fees.

What Happens Next

Friday's proposal begins months of budget negotiations. The governor's administration will release a revised proposal before negotiations begin in earnest in June, with lawmakers facing a June 15 deadline to finalize the budget.

Housing advocates have mobilized to push for restoration of full funding, arguing that premature cuts will waste investments already made in shelter infrastructure and outreach programs.

Assemblymember David Alvarez and other San Diego delegation members are simultaneously working to redirect Proposition 4 funding toward addressing Tijuana River sewage issues, further complicating regional funding priorities.

Assemblymember Chris Ward introduced legislation to ban data brokers from selling sensitive personal information including immigration status, building on previous privacy protection efforts.

Senator Catherine Blakespear of Encinitas filed a bill to ease restraining order processes for domestic abuse victims when military members have proven histories of violence.

The Unanswered Question

California's homelessness funding debate ultimately returns to an unanswered question: Can you meaningfully improve accountability in a system where the officials implementing programs answer to appointed boards rather than directly to voters?

Governor Newsom can demand standardized metrics, quarterly reporting, and performance-based funding. But ultimately, who will be held accountable if counties continue to underperform?

Los Angeles County voters recognized this problem by approving Measure G to create an elected county executive by 2028. San Diego County operates under appointed CAO leadership with no similar plans. San Francisco's consolidated city-county structure with an elected mayor provides clearer accountability—but this model is unique and not easily replicated elsewhere.

Both Newsom and county officials can point to legitimate grievances. The governor correctly identifies slow spending and limited accountability. Counties correctly identify inadequate housing production, workforce shortages, and unrealistic expectations about how quickly complex clinical programs can be built.

Neither side adequately acknowledges the structural governance problems that make meaningful accountability nearly impossible under current systems, nor the fundamental reality that California creates homelessness through housing policy failures faster than any level of mental health funding can address it.

The risk is that this accountability debate becomes a distraction from more fundamental policy failures—particularly California's decades-long underproduction of affordable housing, and a county governance structure that diffuses responsibility so thoroughly that no one can be meaningfully held accountable when programs fail.

As California navigates competing budget pressures, the outcome will determine whether the state's first homelessness decline in years represents a turning point or a temporary blip before conditions worsen and more people return to streets, parks, and public spaces across the state.

The budget negotiations will test whether California can move beyond rhetorical accountability debates to address the structural governance and housing production failures that perpetuate the crisis—or whether the state will continue cutting funding while arguing over who deserves blame for problems no one in the current system has the authority or incentive to solve.

Verified Sources and Citations

Voice of San Diego - Sacramento Report (Primary Source)
- Lathan, Nadia. "Sacramento Report: Newsom Tells Counties 'No More' On Homelessness Funding." Voice of San Diego, January 2026.
- https://voiceofsandiego.org/sacramento-report
Regional Task Force on Homelessness
- "2025 Annual Point-in-Time Count Results." Regional Task Force on Homelessness, 2025.
- https://www.rtfhsd.org/
California Department of Finance
- "Governor's Budget Summary 2026-27." California Department of Finance, January 2026.
- http://www.ebudget.ca.gov/
California State Association of Counties (CSAC)
- "Board of Supervisors - Roles and Responsibilities." CSAC, 2025.
- https://www.counties.org/post/board-supervisors
San Diego County Government
- "Chief Administrative Office." County of San Diego, 2024-2025.
- https://www.sandiegocounty.gov/cao/
- "County Supervisors Approve Appointment of New Chief Administrative Officer." San Diego County News Center, June 4, 2024.
- https://www.countynewscenter.com/county-supervisors-approve-appointment-of-new-chief-administrative-officer/
Los Angeles County Government
- "Board of Supervisors - Executive Office." Los Angeles County, 2025.
- https://bos.lacounty.gov/
- "Responsibilities of the Board of Supervisors." Los Angeles County, 2024.
- https://file.lacounty.gov/SDSInter/lac/1031549_BoardResponsibilities.pdf
Los Angeles County Board of Supervisors - Wikipedia
- Wikipedia contributors. "Los Angeles County Board of Supervisors." Wikipedia, January 2026.
- https://en.wikipedia.org/wiki/Los_Angeles_County_Board_of_Supervisors
Los Angeles County Measure G
- "County Measure G: Los Angeles County Government Structure, Ethics And Accountability Charter Amendment." CAUSE, 2024.
- https://www.causeusa.org/lac-measureg
Los Angeles Public Press
- "The Five Queens: what the LA County Supervisors actually supervise." Los Angeles Public Press, May 23, 2024.
- https://lapublicpress.org/2024/05/supervising-the-la-county-supervisors/
Los Angeles County Auditor-Controller
- "Audit of Homelessness Programs and Expenditures." Los Angeles County Auditor-Controller, 2024.
- https://auditor.lacounty.gov/
California State Auditor
- "Homelessness in California: State Auditor's Report 2024-108." California State Auditor, 2024.
- https://www.auditor.ca.gov/
National Alliance to End Homelessness
- "The Impact of Funding Cuts on Homelessness Encampments." National Alliance to End Homelessness, 2024.
- https://endhomelessness.org/
University of California - Terner Center for Housing Innovation
- "California Homelessness: Causes, Costs, and Policy Responses." UC Berkeley Terner Center, 2024.
- https://ternercenter.berkeley.edu/
City of San Diego Financial Management
- "Five-Year Financial Outlook FY 2026-2030." City of San Diego, 2025.
- https://www.sandiego.gov/fm
Coalition on Homelessness San Francisco
- Policy statements and advocacy materials, 2024-2025.
- https://cohsf.org/
Alameda County
- "Homeless Services Annual Report 2024." Alameda County Health Care Services, 2024.
- https://www.acgov.org/
Santa Clara County
- "Annual Report on Homelessness Initiatives." Santa Clara County Office of Supportive Housing, 2024.
- https://www.sccgov.org/
NBC 7 San Diego
- "San Diego County Board of Supervisors appoint Ebony Shelton as Chief Administrative Officer." NBC 7 San Diego, June 4, 2024.
- https://www.nbcsandiego.com/news/local/san-diego-county-board-of-supervisors-appoint-ebony-shelton-as-chief-administrative-officer/3532433/
Times of San Diego
- "County Supervisors Hold Closed Session in Search for New CAO." Times of San Diego, May 3, 2024.
- https://timesofsandiego.com/politics/2024/05/03/county-supervisors-hold-closed-session-in-search-for-new-cao/
KPBS Public Media
- Coverage of San Diego homelessness initiatives and local government, 2024-2026.
- https://www.kpbs.org/
California State Legislature
- Bill information and legislative tracking, 2026 session.
- https://leginfo.legislature.ca.gov/
California Voter Information
- "Proposition 1 - Mental Health Services Act Modernization." California Voter Guide, March 2024.
- https://voterguide.sos.ca.gov/
California Department of Health Care Services
- Mental Health Services Act (MHSA) oversight and implementation reports.
- https://www.dhcs.ca.gov/services/MH/Pages/MH_Prop63.aspx

This analysis incorporates information from the primary source document and supplementary research on California county governance structures, homelessness policy implementation, and accountability mechanisms. All major claims are supported by cited sources or clearly identified as analytical interpretation.

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