homeless

SAN FRANCISCO — With California facing deep budget uncertainty and widening economic divides, Gov. Gavin Newsom on Friday vowed to protect residents on both ends of the income spectrum — from wealthy business leaders he fears could leave the state to unhoused Californians relying on state-funded services.

That balancing act was on display as Newsom sharpened his criticism of a proposed ballot measure to tax billionaires, a measure opponents say may push tech companies and other businesses out of the state and wound California’s economy.

“It’s already had an outsized impact on the state,” said Newsom, speaking to reporters in San Francisco’s Mission District.

Newsom is trying to head off a union’s plan for a November ballot measure that would put a one-time tax on billionaires. If approved by voters, it would raise $100 billion by imposing a one-time wealth tax of 5% on fortunes.

Service Employees International Union-United Healthcare Workers West, the union behind the proposal, wants to raise money to help millions of Californians affected by widespread healthcare cuts by the Trump administration.

California political leaders, facing a tough budget year, warn that the state does not have the financial capacity to backfill those cuts.

Newsom, who is working behind the scenes with SEIU-UHW in an effort to stop the ballot measure, on Friday appeared doubtful that a deal could be struck with proponents of the measure.

“I don’t know what there is to compromise,” said Newsom, calling the measure “badly drafted” and arguing the money raised wouldn’t be spread among other groups.

“It does not support our public educators. Does not support our teachers and counselors, our librarians. It doesn’t support our first responders and firefighters. Doesn’t support the general fund and parks.”

Two top Newsom advisors, Dan Newman and Brian Brokaw, are raising money and have formed a committee to oppose the measure.

The billionaire tax measure is dividing political leaders in California and the rest of the country, with both Rep. Ro Khanna (D-Fremont) and Sen. Bernie Sanders (I-Vermont) supporting the tax.

“It’s a matter of values,” Khanna said on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid.”

Already, some prominent business leaders are taking steps that appear to be part of a strategy to avoid a potential levy.

On Dec. 31, PayPal co-founder Peter Thiel announced that his firm had opened a new office in Miami, the same day venture capitalist David Sacks said he was opening an office in Austin.

Suzanne Jimenez, chief of staff for SEIU-United Healthcare Workers West, called it a myth that billionaires are leaving the state and criticized Newsom.

“Right now, his priority seems to be protecting roughly 200 ultra-wealthy individuals,” she said. “Healthcare workers are focused on protecting emergency room access and lifesaving care for all 39 million Californians.”

The proposed tax has reverberated throughout the Silicon Valley and Bay Area, home to some of the world’s most lucrative tech companies and financially successful venture capitalists.

Newsom was in San Francisco on Friday, where he served two terms as mayor, to address a separate, more pressing concern for Californians on the opposite end of the economic spectrum — those living in poverty and on the city streets.

Newsom, who is weighing a 2028 presidential run, spoke at Friendship House, a substance-use treatment provider, where the governor said California is turning around the state’s homelessness crisis.

He pointed to a recent 9% statewide drop in unsheltered homelessness as evidence that years of state investment and policy changes are beginning to show results.

That was the first such drop in more than 15 years on an issue that is a political vulnerability for the two-term governor. California still accounts for roughly a quarter of the nation’s homeless population, according to the Public Policy Institute of California.

Newsom said Friday that the decline reflects years of expanded state investment in shelter, housing and behavioral healthcare, combined with stricter expectations for local governments receiving state funds. He said the state’s efforts contrast with what is happening elsewhere, pointing to homelessness continuing to rise nationally.

The governor’s budget proposal, which was released Jan. 9, includes $500 million for California’s Homeless Housing, Assistance and Prevention program, which provides grants to cities, counties and local continuums of care to prevent and reduce homelessness.

That money is paired with investments from Proposition 1, a 2024 ballot measure backed by Newsom and approved by voters. The measure authorized billions in state bonds to expand mental health treatment capacity and housing for people with serious behavioral health needs.

Following Newsom’s budget proposal, legislators, housing advocates and local officials said the funding falls short of the scale of the problem.

That concern is unfolding against a constrained budget backdrop, with the governor’s finance director warning that even as AI-related tax revenues climb, rising costs and federal cuts are expected to leave the state with a projected $3 billion deficit next year.

The nonpartisan Legislative Analyst’s Office said Newsom’s plan leaves California financially exposed, noting that the administration’s higher revenue estimates exclude the risk of a stock market correction that could significantly worsen the state’s budget outlook.

The analyst’s office said those risks are compounded by projected multiyear deficits of $20 billion to $35 billion annually, underscoring what it called a growing structural imbalance.

Newsom on Friday called the LAO’s projections about the budget too pessimistic, but said the office is “absolutely right about structural problems in the state.”

Newsom’s budget does not include significant funding to offset federal cuts to Medicaid and other safety-net programs under President Trump and a Republican-led Congress, reductions that local officials warn could have far-reaching consequences for local governments and low-income residents.

Addressing those broad concerns, the governor defended his budget and suggested the spending plan will change by May, when the state’s financial outlook is more clear.

Times staff writer Seema Mehta and Caroline Petrow-Cohen contributed to this report.

The city of Los Angeles violated the state’s open meeting law when council members took up a plan to clear 9,800 homeless encampments behind closed doors, a judge ruled this week.

In a 10-page decision, L.A. County Superior Court Judge Curtis Kin said the City Council ran afoul of the Ralph M. Brown Act by approving the encampment strategy during a Jan. 31, 2024, closed session.

The encampment plan was part of a larger effort by the city to comply with a legal settlement with the L.A. Alliance for Human Rights, which had sued over the city’s handling of the homelessness crisis.

Kin, in his ruling, said the city is allowed under the Brown Act to confer with its attorneys in closed-door meetings to discuss legal strategy.

“However, what the City cannot do under the Brown Act is formulate and approve policy decisions in a closed session outside the public eye merely because such decisions are in furtherance of a settlement agreement,” Kin wrote.

Karen Richardson, a spokesperson for City Atty. Hydee Feldstein Soto, said her office had no comment on the decision, which was issued earlier this week.

The ruling delivered a victory to the Los Angeles Community Action Network, which advocates for homeless residents and had sued the city over the closed-door deliberations.

Lawyers for LA CAN have warned that the city’s goal of removing 9,800 encampments over four years has created a quota system that could make sanitation workers more likely to violate the property rights of unhoused residents. Under the agreement, the city must reach its encampment removal target this summer.

“The City Council approved an extremely controversial plan to clear almost 10,000 encampments entirely in secret,” said Shayla Myers, the group’s attorney. “They never disclosed the plan before they voted on it, or even after, and the only one they disclosed the plan to was the business community.”

Lawyers for the city have offered contradictory explanations for what transpired during the Jan. 31, 2024, meeting. Now, LA CAN is seeking a court order requiring that the city produce all records — including audio of the closed-door deliberations — to show what transpired.

The city’s strategy for clearing 9,800 encampments has become a major sticking point in its long-running legal battle with the LA Alliance. U.S. District Court Judge David O. Carter ruled that a tent discarded by sanitation workers can only count toward the city’s numerical goal if its owner has been offered housing or shelter first.

Feldstein Soto’s legal team, in a memo to the council, said later that the judge had “reinterpreted” some of the city’s settlement obligations.

In this week’s ruling, Kin found that the city violated the Brown Act a second time in May 2024, when the council went behind closed doors to take up another agreement — this one between the city and L.A. County on the delivery of homeless services.

The LA Alliance first sued the city and county in 2020, alleging that too little was being done to address the homelessness crisis, particularly in Skid Row. The city settled the case two years later, agreeing to create 12,915 new shelter beds or other housing opportunities by June 2027.

After that deal was struck, the city began negotiating an accompanying agreement with the LA Alliance to reduce the number of street encampments. Those talks dragged on for more than a year.

The LA Alliance ran out of patience, telling Judge Carter in February 2024 that the city was 447 days late in finalizing its plan and should be sanctioned. The group submitted to the court a copy of the encampment removal plan, saying it had been approved by the City Council on Jan. 31, 2024.

Video from that day’s meeting shows that council members went behind closed doors to discuss the LA Alliance case. When they returned, Deputy City Atty. Jonathan Groat said there was nothing to report from the closed session.

LA CAN demanded that the city produce any vote tally on the encampment plan. The city declined to do so, saying there was no vote.

“To this day, [we] still don’t know who voted for it, or even if a vote was taken at all,” Myers said.

Lawyers for the city have argued that they were not required to issue any report from that closed session meeting. They also have said that the Brown Act allowed the two agreements — the one on encampment removals and the other with the county — to be discussed behind closed doors.

Carter ruled last year that the city had failed to comply with the terms of its settlement agreement with the L.A. Alliance. On Tuesday, he ordered the city to pay $1.6 million to cover the group’s legal fees.

The judge also instructed the city to pay about $201,000 for fees incurred by LA CAN and the LA Catholic Worker, which have intervened in the LA Alliance case.

On Thursday, lawyers for the city notified the court that they intend to appeal the order to pay the various groups.

Aceh Tamiang, Indonesia – Rahmadani and her nine-year-old son Dimas lost their home when catastrophic flooding ravaged their rented residence in Aceh Tamiang, located in Indonesia’s eastern Aceh province.

Initially seeking refuge on a roadside immediately following the disaster, they relocated to a tent just metres from their ruined house three weeks later.

The devastating floods in December killed at least 1,170 people across North Sumatra, West Sumatra, and Aceh provinces. Weeks after the disaster, numerous displaced victims continue to shelter in temporary tents.

Aceh province suffered the most severe impact, with Aceh Tamiang among the regions hit hardest.

For Rahmadani, her son’s health remains her primary concern. Dimas, who sustained an injury as an infant, is unable to walk or speak.

“Before the floods, we always took him to the doctor, and he was well cared for, so he was healthy. After the floods, we could not go to see a doctor. Even if there is assistance, it is just food aid,” she said.

“His head is swollen, so he needs to take medication and vitamins. The medication isn’t expensive, but now we don’t have any money. My child is in pain, but I can only put him in a sling while I try to earn some money.”

When Virginia Guevara moved into a studio apartment in Orange County in 2024 after nearly a decade of homelessness, she needed far more than a roof and a bed.

Scattered visits to free clinics notwithstanding, Guevara hadn’t had a full medical checkup in years. She required dental work. She wanted to start looking for a job. And she was overwhelmed by the maze of paperwork needed simply to get her off the street, much less to make any of the other things happen.

But Guevara had help. The Jamboree Housing Corp., an affordable-housing nonprofit that renovated a former hotel in Stanton that Guevara now calls home, didn’t just move her in — it also provided her a fleet of wraparound services. Jamboree counselors helped Guevara navigate the healthcare system to see a doctor and a dentist, buy a few things for her apartment, and get training to become a caregiver.

“I was years on the street before I got the kind of help I needed so I could help myself,” said Guevara, 68.

Amid the Trump administration’s apparent opposition to using Medicaid funding for such social services, staffers at Jamboree and similar affordable-housing providers in California have feared losing federal money. The experimental waivers that provide the primary funding for the program expire at the end of 2026. But as it turns out, the state had the foresight several years ago to designate certain nonhousing social services — such as mental health care, drug counseling and job training — as a form of Medicaid spending that will continue to be reimbursed.

Catherine Howden, a spokesperson for the federal Centers for Medicare & Medicaid Services, confirmed that California’s use of the “in lieu of services” classification for these wraparound programs is allowed under federal regulations.

“It is starting to sound positive that we will, at the very least, be able to continue billing for these services after the waiver period,” said Natalie Reider, a senior vice president at Jamboree Housing.

During President Trump’s first term, states were permitted to use Medicaid money for social support services not typically covered by health insurance. But the second Trump administration is reeling that policy back in, saying that the intervening Biden administration took the supportive services process too far. Howden said in a statement that the policy “distracted the Medicaid program from its core mission: providing excellent health outcomes for vulnerable Americans.”

Through CalAIM, a five-year experimental build-out of the Medicaid system, programs such as Jamboree were able to leverage federal funding to offer the kinds of nonhousing social services that experts contend are essential to keeping people permanently housed.

However, these wraparound services are only one component of the CalAIM initiative, which is attempting to take Medicaid, known as Medi-Cal in California, in a more holistic direction across all areas of care. And when CalAIM launched, California officials gave the programs the Medicaid “in lieu of services” designation, known as ILOS, in effect putting them outside the waiver process and ensuring that even when CalAIM sunsets, money for those social initiatives will continue to flow.

“California has tried to future-proof many of the policy changes it has made in Medi-Cal by including them in mechanisms like ILOS that do not require federal waiver approval,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes KFF Health News. “That allows these policy changes to continue, even with a politically hostile federal administration.”

The designation allows these social services to be funded through Medicaid managed-care plans under existing federal laws because they are cost-effective substitutes for a Medicaid service or reduce the likelihood of patients needing other Medicaid-covered healthcare services, said Glenn Tsang, policy advisor for homelessness and housing at the state’s Department of Health Care Services. The state could not provide an estimate of the annual funding for these wraparound services because they are not distinguished from other payments made to Medicaid managed-care plans.

“We are full steam ahead with these services,” Tsang said, “and they are authorized.”

Although California was the first state to incorporate the designation for such housing and other health-related social support, Tsang said, several other states — including Arizona, Arkansas, Florida, New York and North Carolina — are now using the mechanism in a similar fashion.

Paul San Felipe, senior program manager for Jamboree, speaks during a meeting at Clara Vista in Stanton on Dec. 29, 2025.

(Eric Thayer / Los Angeles Times)

Early results suggest such support saves on healthcare spending. When Jamboree, MidPen Housing Corp. in Northern California, RH Community Builders in the Central Valley and other permanent supportive housing providers employ a holistic approach that includes social services, they reported higher rates of formerly homeless people remaining in housing, less frequent use of costly emergency health services, and more residents landing jobs that help them pay rent and stay housed.

At the nonprofit MidPen Housing, which serves 12 counties in and around the San Francisco Bay Area, roughly 40% of the units in the program’s pipeline are earmarked for “extremely low-income” people, a group that includes those who are homeless, said Danielle McCluskey, senior director of resident services.

CalAIM reimbursements help fund the part of MidPen that focuses on supportive services across a wide range of experiences, such as chronic homelessness, mental health issues and those leaving the foster care system. McCluskey described it as one leg of a three-legged stool, the others being real estate development and property management.

“If any of those legs are not getting what they need, if they’re not funded or not staffed or resourced, then that stool is kind of wobbly — off-kilter,” the director said.

A recent state evaluation found that people who used at least one of the housing support services — including navigation into new housing, healthcare assistance and a deposit to secure an apartment — saw a 13% reduction in emergency department visits and a 24% reduction in inpatient admissions in the six months that followed.

Documenting those outcomes is crucial because the department needs to show federal officials that the services lessen the need for other, often costlier Medicaid-covered care — the essence of the classification.

Advocates for the inclusion of supportive services argue that the American system ultimately saves money on those investments. As California’s homeless population has soared in recent years to more than 187,000 on a given night — nearly a quarter of the U.S. total — Jamboree has been allocating more of its resources to permanent supportive housing.

Founded in 1990 in Orange County, Jamboree builds various types of affordable housing using federal, state and private funding. Reider said about a fifth of the organization’s portfolio is dedicated to permanent supportive housing.

“They’re not going back out to the streets. They’re not going to jail. They’re not going to the hospitals,” Reider said. “Keeping people housed is the No. 1 outcome, and it is the cost-saver, right? We’re using Medicaid dollars, but we’re saving the system money in the long run.”

Guevara spent years living out of her truck before a shelter worker connected her with Jamboree. Now she also has found work as a caregiver.

(Eric Thayer / Los Angeles Times)

Guevara, who wound up on the streets after a falling-out with family in 2015, spent years living out of her truck before a shelter worker connected her with Jamboree. There, she was paired with a specialist to help her figure out how to get and see a doctor, and to keep up with scheduling the battery of medical tests she needed after years spent living in temporary shelters.

“I also got a job developer, who helped me get this job with the county so I can pay my rent,” Guevara said of her position as a part-time in-home caregiver. “Now I take care of people kind of the same way people have been taking care of me.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.