LA County officials weigh major cuts to homeless programs

Facing a loss of state and federal funding and increased costs, Los Angeles County officials are considering cutting homeless services and programs by more than 25% in the next budget year.

If approved next month, the spending plan presented to the Board of Supervisors Tuesday would trim $219 million from homeless services and programs, slashing county street outreach efforts in half and closing most of the sites for the Pathway Home encampment clearing program.

Several supervisors pushed back on aspects of the spending plan and urged county staff to find ways to avoid some of the proposed cuts.

“ I'm not particularly happy with everything that I'm seeing,” Supervisor Hilda Solis said. “I've heard from my providers that their people are disappointed.”

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L.A. County’s new Department of Homeless Services and Housing drafted the spending plan. In a presentation to supervisors, officials said the deep cuts were necessary because of the rising costs of operating existing shelter beds and the loss of tens of millions in temporary state and federal funding.

The proposal comes after county voters approved Measure A in 2024 to increase the sales tax rate and double county dollars dedicated to addressing the homelessness crisis.

“This is really challenging, and we’re making recommendations that nobody wants to be making,” department Director Sarah Mahin told supervisors.

After the department published a draft of the plan in November, authorities changed the proposal to avoid more than $80 million in additional program cuts. They did that by securing $39 million one-time state grants and implementing about $45 million in other cost-saving measures, officials said.

Dozens of homeless service providers on Tuesday thanked county officials for shrinking the initial $303 million shortfall and urged them to avoid further cuts to services.

“We truly appreciate the progress you've made, but now the remaining shortfall is devastating for Los Angeles and for organizations like ours that are already stretched to the limit,” said Georgia Hawley of Midnight Mission, a homeless shelter in Skid Row.

Garrett Lee, of Department of Mental Health's HOME Team, collaborates with LAHSA’s Homeless Engagement Team during outreach in the targeted COVID-19 testing efforts in the homeless community in 2020.

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Courtesy of Los Angeles County

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What’s driving the deficit?

Several factors are driving the budget deficit projected for the fiscal year that begins in July, according to L.A. County’s homelessness department.

• Shelter bed cost increases: The rates L.A. County pays shelter bed operators went up last year. It will now pay 46% more — an increase of $86 million — to maintain the same 6,000 shelter beds, officials said.
  
• Funds expiring: Several temporary funding sources — totaling about $185 million — have ended or will end in the next fiscal year, officials said. That includes $38 million in federal COVID relief and more than $80 million in state funding.
  
• Consumer spending: Sales tax revenue from Measure A is projected to decrease by $14.5 million in the next fiscal year because consumer spending is down.
  
• Carry-over funds: There are fewer one-time funds available from previous budget years that can be rolled into the coming budget year, officials say.  That number is down by $18 million.
  

Measure A looms large

Last year, L.A. County started collecting revenue through Measure A. The additional 0.5% sales tax approved by voters to address homelessness is expected to generate about $1 billion for L.A. County next budget year. That’s double the revenue generated under the county’s previous homelessness sales tax ordinance.

On Tuesday, service providers said the county cuts don’t make sense to voters who approved Measure A.

“This is not what voters intended when they doubled the tax on themselves to address the homelessness crisis,” said Katie Hill, CEO of Union Station Homeless Services, a Pasadena homelessness nonprofit.

Dozens of homeless services employees lined up to echo that message and demanding officials restore the full budget.

" My request is that you please not approve this plan without filling the gap first,” said Erin Thompson of Inner City Law Center, a nonprofit law firm. “Please find the funds.

Deandra Davis, from the homeless service provider HOPICS, said cutting programs doesn't end up saving the county money in the long run. The costs get pushed elsewhere.

“We shift these costs to jails and hospitals," she said.

Under Measure A, about 60% of revenue has to go toward homeless services. That’s about $625 million for next budget year.

Nearly 36%, or $372 million, must go to the L.A. County Affordable Housing Solutions Agency to support housing development. County homelessness officials said that agency is expected to take on some of the homelessness prevention functions cut from the county’s homeless services budget.

“Measure A has given the overall system more tools to address the homelessness crisis, but fewer of them are held directly by the county,” Supervisor Janice Hahn said Tuesday.

Proposed reductions

L.A. County’s latest homelessness budget proposal includes a $92 million reduction for the county’s Pathway Home program, which moves unhoused Angelenos out of tent encampments by offering them hotel room beds. Pathway Home would be reduced from more than 1,200 beds at 20 project sites to 460 beds at seven sites, officials said.

Fewer beds for the program will mean more tent encampments in areas it serves, officials said.

Solis and fellow Supervisor Holly Mitchell said the program has been crucial for their constituents.

“This continuing attack on Pathway Home is problematic,” Mitchell said at Tuesday’s meeting. “We are clearly heading in a direction where our ability to ultimately resolve homelessness and address encampments and continue to make the progress we've seen in the last couple of years will be severely constrained."

Holly J. Mitchell, an LA County Supervisor who represents the second district.

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Samanta Helou Hernandez

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LAist

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The budget plan also includes $127 million in reductions to other programs, including at least 100 frontline worker jobs. Outreach and prevention-related programs would be hit hardest, officials said.

Street outreach-related programs would be reduced by 60% and staffing in those programs would be cut by about half.

Mahin said parts of the county outside the city of Los Angeles will be disproportionately affected by reductions to outreach programs. Her department recommended reductions to certain outreach teams working outside city limits, but not in L.A.

That’s because of legal obligations under a settlement of a major homelessness lawsuit brought against the city and county by The L.A. Alliance for Human Rights.

“There is a requirement due to the L.A. Alliance for the county to maintain a certain level of outreach services in the city of L.A. through next fiscal year,” Mahin told LAist.

Critics of the spending plan urged supervisors to look at other parts of the budget to help save programs still on the chopping block.

Lily Clark of HOPICS told county officials the cuts would hurt her unhoused clients.

"What we can't do is eliminate the programs that prevent homelessness and expect the crisis to improve,” Clark said. “ Every subsidy cut, every outreach program lost, every navigation team dismantled, each one represents a person who will fall through the cracks.”

Next steps

Solis said on Tuesday that she hopes to see changes to outreach spending and other recommendations before approving the plan next month.

“ I know we're gonna have opportunity to try to make some adjustments,” she said.

Mahin told LAist her department has been “turning over couch cushions” looking for other sources of funding to help address the planned cuts and reductions.

“Unless people are bringing other funding solutions to the table,” Mahin said, “My question is: we can make changes, but what would you like to cut instead?”

Supervisor Lindsey Horvath said local programs are getting cut because state and federal dollars dried up and costs rose, not because L.A. County cut spending.

“ We cannot invent dollars we no longer receive,” Horvath said. “We're the only level of government that has actually increased our investment. Every other level of government has decreased, and we cannot backfill these gaps.”

The board is expected to vote on the proposed budget Feb. 3.