Hundreds of millions in reductions to homelessness programs. A pause in billions for subsidized child care. A $510 million reduction to the Middle Class Scholarship program. And $300 million in annual reductions to public health funding.
Those are just a handful of the proposed budget cuts across 260 state programs in California Gov. Gavin Newsom’s latest $288 billion budget proposal, commonly referred to as the “May Revise,” which he announced Friday, May 10.
But what do those numbers mean for Orange County agencies and programs that rely on state funding?
While these cuts aren’t set — Newsom and the state legislature have until June 15 to work out final details — California faces a budget deficit of approximately $45 billion.
“It’s definitely a very tough budget with serious reductions and delays,” said Assemblymember Sharon Quirk-Silva, D-Fullerton, who chairs the Budget Subcommittee on State Administration. “We had already predicted that there would be many cuts in many areas, but we see dramatic cuts in housing, homelessness, cuts in education, programs that will be eliminated, programs that will be delayed.”
Here are several ways the governor’s proposed budget cuts could affect Orange County.
Homelessness
Newsom proposed major cuts to the state’s homelessness programs, including a one-time $260 million cut from the Homeless Housing, Assistance and Prevention (HHAP) program — supplemental funds that were set to be released to cities and counties this year and next year.
Established in 2019, the grant, which is California’s main source of homeless funding, provides cities and counties money to address local needs related to homelessness.
The proposed cut comes at a time when homelessness in Orange County is up 28% since 2022.
“HHAP dollars for us have been really, really important,” said Tim Shaw, chair of the Orange County Continuum of Care board. “The main attribute to these dollars that are so important to the system is their flexibility, the ability to be innovative in the use of these dollars.”
Unlike much state funding that is tied to a specific cause, HHAP money can go toward a wide array of needs, including, but not limited to, rapid rehousing, interim housing, street outreach, a homeless management information system and administrative costs.
Shaw said HHAP, among other things, has funded emergency shelters, homelessness prevention programs and rapid rehousing programs for families in Orange County and also made sure Project Homekey projects got off the ground in Anaheim and Huntington Beach.
“When you look at the breadth of types of initiatives and needs that we’ve met with HHAP, taking them out of the system is catastrophic,” he said.
Slimmer HHAP funding also means less support for transitional-age youth who are homeless or are at risk, said Shauntina Sorrells, chief program officer at the Samueli Foundation. HHAP is the main funding source from the state dedicated to transitional-age youth, she added.
In Orange County, the rate of homelessness among transitional-age youth has gone up 31% since 2022.
“Anytime we have the potential for instability, not only is that impacting the workers, but also the end-user, the people they are trying to help,” said Becks Heyhoe, executive director of United to End Homelessness. “It impacts their ability to deliver services and impact the quality of service for the end-user.”
Services that support crime survivors
Hundreds of thousands of people who have experienced domestic and sexual violence, child abuse, human trafficking and other crimes in California are at risk of losing out on vital services due to a projected 44.7% loss in federal Victims of Crimes Act (VOCA) funding to the state.
In Orange County, those cuts are likely to affect the thousands of survivors who receive assistance ranging from counseling, emergency shelters and therapy to rape crisis/sexual assault centers, crisis hotlines, legal therapy and community crisis response.
Anti-violence programs statewide, including Laura’s House and Waymakers in Orange County, have implored the state to backfill $200 million, but there is no reference to any victim services backfill in the summary of the budget proposal.
For Laura’s House, the counseling department will take the hardest hit due to cuts to VOCA funding, said Lia Chacon, the group’s legal advocacy director.
“Last year, we provided services to 702 survivors and with the cut, it would impact anywhere from 300 to 400 survivors for counseling alone,” she said. “Survivors are not only the adults that we service, but also their children. It impacts the entire family.”
Lita Mercado, chief program officer of Waymakers’ victim assistance programs, said “preparing for a 44.7% cut is an impossible task.”
The organization served more than 20,000 direct victims of crime last year, Mercado said, including at Cook’s Corner following a mass shooting there last August. Waymakers provided on-scene support, making sure victims got connected to the resources they need and gave support to families during death notifications.
“With that cut, there will be no on-call staff for any of those victims,” she said.
Mercado said Waymakers will most likely rely on law enforcement at the scene to inform victims about the resources available to them, and then rely on those victims to call them.
“To expect that victims will have the presence of mind to do that is irresponsible,” she said. “All of that proactive work that we do would be completely eliminated. A VOCA cut of 44.7% not only reduces my staff in half, but I don’t even think I can articulate what that means for underserved populations and our ethnic communities who already have access issues.”
Workers have already been alerted that staff cuts may happen, and Waymakers has started contemplating starting waitlists for clients and operating on an appointment-only basis, Mercado said.
Transportation
While transportation agencies dodged direct cuts in the revised budget, the $17.3 billion in cuts in the early action budget package Newsom and legislative leaders agreed to in April delays $1 billion in grant funding for transit and intercity rail projects.
The anticipated funding being delayed is an integral part of Orange County Transportation Authority’s annual budget, said OCTA spokesperson Eric Carpenter.
“Our budget relies on receiving these funds as planned,” he added.
This year, OCTA’s anticipated state funding through the TIRCP (Transit and Intercity Rail Capital Program) and the ZETCP (Zero-Emission Transit Capital Program) is approximately $182 million. Delaying those funds would hinder OCTA’s ability to fund Metrolink rail service in Orange County, Carpenter said, and redirecting other funding to cover operational shortfalls could also limit OCTA’s ability to invest in transit projects including the future operation of OC Streetcar between Santa Ana and Garden Grove.
“From the funding sources that now may be delayed, we have $39 million planned for OC Bus and $26 million for Metrolink rail operations,” he said. “That’s a more than $65 million shortfall.”
K-12 education
Adding onto a cut of roughly $500 million from a K-12 program to help districts pay for building projects as well as the delay of $550 million from a similar program for preschool, transitional kindergarten and full-day kindergarten projects, Newsom proposed revising downward the method for calculating educational funding under Proposition 98, which “sets aside a minimum amount of funding for schools and community colleges,” according to the Legislative Analyst’s Office.
Lowering the funding requirement will potentially lead to smaller budgets for school districts and charter schools, said Ramon Miramontes, deputy superintendent of the Orange County Department of Education.
And coupled with a minimal cost-of-living adjustment, Newsom’s proposal will likely make it more difficult for schools to handle rising costs while addressing chronic absenteeism and declining enrollment, he added.
“School districts and charter schools … will be faced with difficult decisions in the months and years ahead. Active engagement from families and community members is crucial to ensure that resources are allocated in ways that truly reflect the needs, values and priorities of each community,” Miramontes said.
Ryan Burris, spokesperson of Capistrano Unified, which is the largest school district in Orange County, said the district is “wary of novel approaches that could impact future state funding for public school students.”
Postsecondary education
UC and CSU students will also be affected by potential cuts. In the early action budget package, Newsom and state legislators agreed to defer almost $500 million in funding by one year to UCs and CSUs, and, in the May Revise, Newsom proposed slashing $510 million in ongoing support for the Middle Class Scholarship.
Some schools have reported they have already started making cuts, including putting in place a hiring freeze.
While UC Irvine does not currently have a hiring freeze, according to university spokesperson Tom Vasich, the school is facing a “projected structural deficit,” meaning that its annual revenue is being outpaced by its operating expenses.
The school has started identifying areas where spending could be cut, including by reducing off-campus leases and reducing the budget across all schools and divisions within the university.
Social services, public health and child care
Newsom proposed more than $170 million in reductions to two CalWORKs programs: one that provides home visiting services to pregnant women, caretakers and parents and another that offers mental health and substance abuse services.
While the summary of the most recent budget proposal doesn’t specify cuts to other CalWORKs programs, Jamie Cargo, spokesperson of the OC Social Services Agency, said the agency is keeping an eye on cuts to several programs Newsom proposed in January that help families stabilize and prevents them from entering the child welfare system.
One is the family stabilization program, which includes mental health, domestic abuse and substance abuse support, as well as housing assistance.
From fiscal year 2020-2021 to January 2024, the program supported and served 4,508 adults and 7,563 children in Orange County, according to Cargo.
“Family stabilization also assists children and families through Family Resource Centers, providing additional assistance, such as food distribution and gift cards for obtaining gas and other basic needs, and hygiene products,” she said.
The OC Health Care Agency will also be affected by fewer state dollars — Newsom proposed eliminating $52.5 million this year and slashing $300 million annually in state and local public health funding.
In Orange County, that would result in a nearly $13 million elimination of funding in 2024-2025, said agency director Veronica Kelley.
The OC Health Care Agency is “completing a full impact analysis, including the review of mandated and core functions, programming needs and staffing models,” Kelley said.
Funding for child care, while not being taken away, will see a pause in $1.4 billion “until fiscal conditions allow for resuming the expansion,” Newsom said, although he did not specify exactly when that would be.
“For Orange County residents, the pause may exacerbate already-existing challenges in finding and affording child care,” said Kimberly Goll, president and chief executive officer of First 5, which oversees allocation of Prop. 10 tobacco tax funds in Orange County for services to children ages 0 to 5 and their families.
In 2020, an analysis commissioned by First 5 revealed that the county suffered from a profound shortfall in affordable, licensed child care even before the pandemic.
