Six months after a scathing state audit found that California had failed to track the $24 billion it spent to combat homelessness over the past half-decade, Gov. Gavin Newsom has vetoed a bill that would have required state homelessness programs to more closely monitor and report their spending.
In a message explaining his decision to kill the measure — which had near-unanimous, bipartisan support in the state legislature — Newsom said that “while I fully support efforts to increase accountability and the effectiveness of our state homelessness programs, similar measures are already in place.”
The author of Assembly Bill 2903, Assemblymember Josh Hoover, a Republican from Sacramento County, responded that the veto amounts to Newsom “doubling down on his failed response to homelessness.”
“Our state has spent billions of taxpayer dollars in recent years only to see the homeless population increase statewide,” Hoover said in a post on X, formerly Twitter. “We will not solve this crisis until we get serious about accountability.”
At last count, the state’s homeless population had ballooned to more than 181,000, a nearly 60% increase over the past 10 years.
In a much-anticipated April report on the audit, the California State Auditor found the state had no system in place for determining whether its homelessness spending is actually helping solve the crisis. Without more reliable data, the auditors wrote, the state “will continue to lack complete and timely information about the ongoing costs and associated outcomes of its homelessness programs.”
An accompanying audit by the state of homelessness programs in San Jose and San Diego highlighted similar findings.
Newsom, widely thought to have political ambitions beyond the governor’s office, sought to frame the audits as evidence of the need for more accountability for local governments receiving state homelessness grants. He soon announced a plan to set stricter homelessness goals for cities and counties while threatening to withhold funding if the benchmarks aren’t met.
Local governments can use the state money to build homeless housing or shelters, fund street outreach teams and clear encampments, among other efforts.
In his veto message, Newsom pointed to recent laws that increase reporting requirements for two of the largest state homelessness programs. He also cited AB 799, a separate bill he signed into law this year, requiring state agencies to compile “fiscal and outcome data” on their homelessness programs and make the information public starting in 2027.
Newsom said AB 799 “addresses the same objectives” as the vetoed bill in “a more targeted and cost-effective manner.” The failed measure would have required agencies to collect more detailed data on every state homelessness program and make it public by 2026.
Christopher Martin, a policy director with Housing California, a group that advocates for affordable housing and homelessness solutions, agreed the vetoed bill was “largely duplicative.”
State Sen. David Cortese, a Democrat from San Jose who was the driving force behind the audit, said the Newsom administration now has the tools to oversee the state’s homelessness spending, even though he voted in favor of the vetoed bill. But he also made clear the governor needs to do more than pay lip service to the issue.
“His veto message is only as effective as his ability to hold his own agencies accountable,” Cortese said.
Cortese added that Hoover, the bill’s Republican author, repeatedly hammered Newsom on the audits’ findings likely didn’t help the bill’s chances. “I don’t think the governor appreciated that,” he said.
In addition to the audit, a Bay Area News Group review last year found the state exercises limited oversight of its $3.5 billion Homekey homeless housing program, which, since starting during the pandemic, has helped transform aging motels and other properties into desperately needed housing and temporary shelters for thousands of homeless people statewide.
The review found some Homekey sites struggled with habitability and drug problems, and that hundreds of people ended up back on the street after spending time at facilities across the Bay Area. Earlier this year, Newsom announced another $2.2 billion to extend the program.
Cortese contends that part of the reason Homekey hasn’t received more scrutiny is that the legislative committee in charge of state audits declined to hold a hearing on the homelessness spending audits.
“Legislators would have said, ‘No, it’s not OK to be that laissez faire with that Homekey money,’” he said.
Despite the overwhelming support for the vetoed bill among lawmakers — it didn’t receive a single “no” vote — Cortese said it was unlikely there would be an attempt to override Newsom’s veto, something the state legislature has not attempted since 1979.
Thad Kousser, a political science professor at UC San Diego, said the Democratic supermajority has little appetite to challenge the governor out of fear of retribution and risking an “inter-branch war that no one wants.”
“Legislators respect that governors play a role in the process, especially members of his own party,” Kousser said.
Cortese added that an override was even more unlikely in this case, given that a Republican sponsored the bill.
“We do have Ds and Rs after our names when it comes down to it,” he said.
