'Cities cannot shoulder this responsibility alone.’ Cities urge state leaders to back up promises with funding

By Cal Cities Staff

Cal Cities on Tuesday sent a letter to the Governor and legislative leaders outlining its four funding priorities: Restore state homelessness funding to its previous funding levels, safeguard local revenues, invest in local climate resilience and disaster preparedness efforts, and fully fund the voter-approved Proposition 36.

“These priorities are critical for the well-being of our residents, but they require a strong partnership and investment from the state,” said Cal Cities President and El Cerrito Mayor Gabe Quinto. “We are calling on the Governor to prioritize these issues in the state budget, preserve our local economies, and protect our cities.”

What do we know about the state budget right now?

State leaders are staring down a $18 billion budget shortfall, along with more federal funding cuts and delays on the horizon. Gov. Gavin Newsom’s administration will announce his budget proposal on Friday. As with past budget deficits, the Governor has struck an optimistic tone, telling MS Now that the budget will “surprise some people.”

There’s some evidence to support his claim, as December income taxes came in well above projections. But that's still not enough to fully cover the multiyear budget hole.

Newsom may give a preview of his budget tomorrow morning, during a State of the State address to both houses. The announcement is merely the blueprint for months of negotiations that last through the session. Keep an eye on your inbox for a budget analysis from Cal Cities, which will likely land late Friday afternoon.

Is Cal Cities asking for new money?

Cal Cities is urging state leaders to stand by their promises to make California affordable and safe. Last year’s budget failed to include any new funding for the state’s flagship Homeless Housing, Assistance and Prevention Grant Program or funding to help cities of all sizes spur affordable housing. Similarly, lawmakers have not yet fully funded Proposition 36, a bipartisan public safety initiative overwhelmingly approved by voters.  

Cal Cities is also urging the Governor not to divert local revenue streams to close the state budget deficit or increase costs for cities with new unfunded state mandates. These actions would only deepen cities’ financial strain, undermine the delivery of essential services, and weaken the very economic engines that drive California’s prosperity.

“Local governments are facing fiscal headwinds just like the state, which means we all need to work together to ensure cities can keep delivering the vital services our residents depend upon,” said Cal Cities Executive Director and CEO Carolyn Coleman. “Together we need to protect what is most important to Californians: Keeping residents in their homes, protecting our environment, ensuring our local economies work for families, and keeping our streets safe.”

Cal Cities is also calling on the Governor to prioritize state investments in local efforts to support local disaster preparedness, mitigation, response, and recovery efforts, as well as local long-term climate resilience projects.

What city leaders are saying

Local officials from throughout the state stand behind Cal Cities' budget priorities.

“Mountain View is doing its part to address homelessness and build affordable housing, but cities cannot shoulder this responsibility alone,” said Mountain View Mayor Ellen Kamei. “With over 1,300 units in the pipeline and a $50 million funding gap, sustained state funding is essential to reduce homelessness and deliver affordable housing statewide.”

“The Eaton Fire reminded our community how real and devastating these disasters can be,” said Pasadena Mayor Victor Gordo. “As large-scale emergencies and disasters grow more frequent, investing in local preparedness is a statement of our values, one that protects lives, strengthens communities, and prepares our State for what lies ahead.”  

“Voters sent a clear message when they passed Prop. 36: California must invest in public safety, treatment, and accountability,” said Stockton Council Member Michael Blower. “Fully funding this measure is essential to delivering on that promise. Cities like Stockton need the resources to expand treatment for those struggling with substance use and mental health challenges, while also ensuring repeat offenders are held accountable. I urge the Governor to prioritize full funding so communities across California can be safer and healthier.”

“We are facing a significant financial crisis,” said Arvin Mayor Olivia Calderón. “Our city, like many in the Central Valley, has experienced a 30% decrease in sales tax revenue. This is one of our main sources of income. This decrease, coupled with inflation and unfunded mandates, is straining our ability to deliver essential services. Our residents urge the Governor to safeguard local revenues and recognize cities as vital to California’s economy.”