Gov. Newsom and Legislature Each Want Additional $200M For Homeless

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.

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. …

Click here to read the full article from the California Globe.


  1. Disgusted in California says

    Newsom IS a lot of the problem. WHY would anyone want to pay the exorbitant taxes in this state – when WE’re gonna give them food stamps and housing and free medical care. Seriously – Nuisance – WHY WOULD ANYONE want to pay your fees to live here – when you’re giving everything for FREE to illegals and homeless!!! Why don’t you let a “few” of them camp in your vineyard and eat in your restaurant – FOR FREE!!!!!????? Then I might be impressed with your stupid, idiotic childish ideas!!!!

  2. I urge everyone to sign the RECALL NEWSOM CAMPAIGN…This is not HIS SLUSH FUND….

  3. Hundreds of millions of tax money have been thrown at the homeless and their population keeps growing.
    Make “urban camping” illegal with mandatory incarcerationfor a specified period. Convert unused large industrial warehouses into mass detention centers.
    Provide counseling, food, uniforms, bedding, restrooms. Require a day’s work cleaning up highways wurh transportation to and from.
    It will allow those that have the potential to return to society a chance to reform.
    Yes, it violates their civil rights but they violate our civil society every day.
    It is a “hard choice” but it will provide employment and it will save lives.

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