LA County’s new homeless services department facing 25% funding cuts that providers call ‘devastating’

A brand new Los Angeles County homeless services department, paired with new, voter-approved sales tax dollars, were billed as a one-two punch that would dent the homeless crisis by taking more people off the streets and placing them into shelters and housing.

Instead, the double feature has been saddled with less than expected revenues, from a downtrend in consumer spending decreasing Measure A outflow, deep cuts in state and federal funds, and higher housing costs, forcing reductions in services amounting to close to a quarter million dollars a year.

In Hollywood, sometimes the feature show doesn’t always meet expectations. And that’s manifested in $219 million in proposed homeless services cuts for fiscal year 2026-2027 from the county’s Homeless Services & Housing Department (HSH) budget, announced on Jan. 13.

Plus, the ax is falling on some of the most successful homeless programs in past years such as community outreach teams and the county’s pathway homes program that takes those from outdoor encampments and old RVs and places them in hotel rooms, experts say.

“I am rather disgusted with the cutbacks,” said First District L.A. County Supervisor Hilda Solis, after hearing the budget proposal on Jan. 13. “It is a new department with (close to) a $300 million deficit. And I know it is going to get tougher.”

The drop in expected revenues forced HSH Director Sarah Mahin to prioritize funding to pay for existing people already in motels, shelters and permanent housing, while reducing funds from other programs.

“We prioritized the housing we have that is keeping people in housing today, to make sure we are not putting people out onto the street,” Mahin said during an interview on Jan. 14.

As a result, she recommends $92 million in cutbacks to pathway homes that will severely cut the number of hotel and motel beds available for the unhoused. Breaking up encampments will not be possible if there are no beds for the homeless residents, experts explained.

The county’s pathway homes program was formed in 2023 in response to L.A. Mayor Karen Bass’s Inside Safe program. Solis said the county has used the funding to move homeless individuals out of encampments and into housing in Pomona in November 2023, from the San Gabriel River near Azusa, in the Whittier Narrows area and most recently in East Los Angeles on Jan. 29, 2025.

“It has been so effective,” Solis said. “We know it works. We are shooting ourselves in the foot by reducing those services.”

Since 2023, the program has helped about 1,800 residents enter housing, and of those, 450 are permanently housed, according to the Los Angeles County Homeless Initiative. This includes those from street encampments and illegal and unsafe RVs.

Effects of cutbacks

Third District Supervisor Lindsey Horvath, who led the charge to form the new county department, credited Mahin with reducing the budget shortfall from $303 million to $219 million. Mahin explained she was able to find a one-time state grant for $39 million. She also reduced duplication from services provided by the Los Angeles Housing Services Authority (LAHSA), creating an extra $45 million.

“I am especially pleased to see a savings of $45 million in programmatic efficiency. You are using public dollars smarter,” Horvath said at the Jan. 13 board meeting.

Still, other cuts will hurt the progress in reducing homelessness in the county, according to nonprofit homeless services providers. The number of unsheltered individuals has gone down two years in a row, according to the point-in-time homeless counts performed every year. The next homeless count will take place from Tuesday, Jan. 20 to Thursday, Jan. 22, as volunteers fan out across the county, except Long Beach, Glendale, and Pasadena, which operate their own separate counts.

Mahin’s budget also calls for $127 million trimmed from other programs, including cutting in half community outreach services. This involves cuts in street teams going from encampment to encampment, building trust, and finding housing placements with wrap-around mental health treatment and drug abuse treatment.

Despite the found funding to trim the deficit, the reductions proposed still amount to about a 25% cut in programs and services in the next fiscal year, including more than 30 programs eliminated, noted Jerry Jones, executive director of the Greater Los Angeles Coalition on Homelessness, which includes 61 frontline organizations providing homeless services in the county.

Only interim and permanent housing are funded, he said, while “pretty much everything else is cut back or eliminated for the coming year. We don’t think that is a reasonable public policy.”

Jones said he’s spoken to many organizations in the coalition and they are very concerned that the cutbacks will not move the needle on reducing homelessness but may actually wipe away gains made in the last two years.

“Across various kinds of organizations, there is a sense of alarm that if we take that much money out of homeless services, it will be devastating,” Jones said in an interview Jan. 14.

LA County looking for help

First there is Measure H, a quarter-cent sales tax in L.A. County passed by voters in 2017 for homeless services. Since that was expiring, voters in November 2024 replaced it with Measure A, a half-cent sales tax for the same purpose. So the new measure raised the tax paid by consumers another quarter of a cent and went into effect April 1.

Measure H produced about $355 million every year, while proponents estimated Measure A would generate $1.2 billion annually. But that now became a little more than $1 billion, or about $200 million less than anticipated due to lower consumer spending.

But HSH only gets about $544.3 million, almost the same as the previous County Homeless Initiative got from Measure H. About 35% goes to the Los Angles County Affordable Housing Solutions Authority (LACAHSA) for providing rent to those falling into homelessness and for building affordable housing.

The voters wanted to share the tax money not just with LA County, but with the 88 cities in the county which gets about $94 million. Los Angeles gets the largest chunk of that, about $58 million.

Fourth District Supervisor Janice Hahn emphasized that cities must now set up winter shelters and do more to augment county efforts to bring people off the streets.

“Cities will be getting a lot of money for homelessness,” she said. “They need to step up. This should be a shared responsibility.”

Likewise, Horvath said these other agencies and cities need to provide services that otherwise would have been paid for by state and federal dollars, which have been reduced.

“Federal and state government have reduced their investments and we cannot backfill these massive reductions, such as loss of housing vouchers, as well as cuts to health, food and social service programs,” said Horvath.

Jerry Jones said it’s admirable if cities add services, but he believes the county can fully fund its own homeless services agency, even if that means cutting other parts of the budget. The county’s FY 2025-2026 budget totaled $52.5 billion.

“I feel like we’ve got to take care of basic human needs. The county’s budget is big enough, around $50 billion, that they can solve a hole of more than $200 million,” Jones said.

The budget, including the allotment for homeless services, will be taken up on Feb. 3, the board announced.

“Seven unhoused people die every day in L.A.,” said Georgia Hawley, chief communications officer with the Midnight Mission, a shelter in Skid Row in L.A. “If these cuts move forward, sadly, that number will grow.”