Gov. Newsom’s May budget revision asks cities to do more with less on housing and homelessness

Contact: Karina Rodriguez
krodriguez@calcities.org
(916) 317-4199                                                                                       

FOR IMMEDIATE RELEASE

Sacramento — Following the release of Gov. Gavin Newsom’s revised 2026-27 budget proposal, League of California Cities Executive Director and CEO Carolyn Coleman issued the following statement:

“Like the state, local governments are tightening their belts and making tough budget decisions, while preserving the delivery of essential public services. We applaud the Governor’s support for solutions that increase revenues at the local level, including a digital software tax. This is a positive step. 

But the May Revision falls short on homelessness. At the same time, the Governor touted the state’s progress on reducing unsheltered homelessness, he proposes cutting round 7 of the Homeless Housing, Assistance and Prevention grant program — the backbone of the state’s local homelessness response system. This will slow hard-won progress by forcing cities to close shelter beds and reduce homelessness prevention programs. Cities need an ongoing funding commitment to reduce the homelessness crisis, not a decrease in funding.   

On top of state cuts in funding to address homelessness, the Governor’s proposal also cuts funding for housing by banning local impact fees on projects supported with state affordable housing funding. Impact fees help fund the very infrastructure — sewers, roads, parks, fire protection, and water — that make these projects viable. Contrary to the Governor’s remarks, cities are not “pocketing state money” when they assess impact fees.

Finally, the May Revision ignores the will of the voters on public safety by failing to include new funding to implement Proposition 36. 

We look forward to working with the Governor and the Legislature in the coming weeks to bridge the gaps on housing, homelessness, and public safety. 

Established in 1898, the League of California Cities is a nonprofit statewide association that advocates for cities with the state and federal governments and provides education and training services to elected and appointed city officials.

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