California, which has the US’s highest rate of homelessness, will likely ask voters to approve billions of dollars more in spending to help address a crisis that’s spilled onto the streets of every major city in the state.
Governor Gavin Newsom plans to ask the Democratic-controlled California legislature to put a measure on the November 2024 ballot seeking to issue a $3 billion bond to pay for construction of mental-health treatment centers capable of serving at least 10,000 people a year.
Newsom also wants to divert $1 billion a year from an existing 1% tax on people earning at least $1 million to fund mental health and drug-addiction services, struggles associated with life on the streets.
California’s homeless population has swelled to roughly 171,510 people — about 30% of the US total — despite years of concerted efforts to stem the crisis. The situation has worsened even as aid has poured in, with one estimate by the watchdog Interagency Council on Homelessness showing the state invested $10 billion between 2018 and 2021, media nonprofit CalMatters reported.
In Los Angeles County, almost 64,000 people sleep on sidewalks and makeshift tents at night — the highest number since authorities began an official count in 2015, while in much-smaller San Francisco the population is about 7,800. San Diego has 8,400 people living on the streets, up 10% from the last tally in 2020. The data are based on point-in-time counts of unhoused people on a single night.
Experts cite a mix of economic factors for the growing problem, including a tight real estate market that’s led to skyrocketing rent prices and a scarcity of affordable housing, along with tepid wage gains for lower-income workers.
Newsom said on Sunday that integrating services for residents who are both homeless and mentally ill is “the most acute challenge this state faces.”
He said his plan is an attempt to remedy the unintended consequences of a 1967 law signed by Ronald Reagan, when he was governor of California, to end the practice of hospitalizing patients in mental health institutions against their will. The state was instead supposed to rely on community health facilities, but they were never built.
Newsom’s advisers say the governor will work with legislative leaders to prepare the bond measure, ultimately targeting to raise an amount based on projected costs.
The proposal comes as California is facing leaner times. After years of budget surpluses, the state’s financial fortunes are turning, with a projected $22.5 billion budget deficit. The technology sector is laying off workers and stock market declines are hurting the incomes of top earners who pay a large share of taxes.
Surveys show that homelessness is a top concern for California voters, who have in recent years approved measures to address the situation. In the most recent example during November’s election, Los Angeles voters passed an initiative to increase the transfer tax on property deals valued at $5 million or more to raise money for affordable housing. It takes effect April 1.
--With assistance from Rob Golum.
©2023 Bloomberg L.P.
