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Prepared by Precision Advocacy
Newsom Administration and Counties Sue Over Homelessness Grant Funding
The Newsom Administration announced a new lawsuit against the Trump administration last week, with Santa Clara County and San Francisco together with the National Alliance to End Homelessness and the National Low Income Housing Coalition following suit this week. Both suits accuse the U.S. Department of Housing and Urban Development (HUD) of illegally going over Congress’ head to make massive changes to the way federal homelessness funds are distributed.
“HUD’s new grant rules would effectively defund permanent supportive housing and rapid rehousing programs across the nation, eliminating proven tools that help residents exit homelessness sustainably,” Santa Clara County Counsel Tony LoPresti said in a statement. “This is another instance of the Trump administration prioritizing its political agenda above the needs of our most vulnerable community members.”
Last month, the federal Department of Housing and Urban Development (HUD) released new funding provisions in its 2025 Continuum of Care (CoC) notice of funding opportunity. The changes included a number of new rules that limit how the $4 billion in available funding is spent.
Specifically, the new rules cap spending by CoCs at 30% for permanent supportive housing and rapid rehousing. Last year, California CoCs were awarded more than $683 million in CoC funding, approximately 90 percent of which went to permanent housing projects. The new rules would gut funding for those projects, which currently keep tens of thousands of people housed. The policy is a major reversal from years of federal policy that prioritized funding permanent housing using the “housing first” method — a strategy that moves people into housing as quickly as possible, without requiring them to first get sober or agree to addiction treatment.
The new policy also prohibits the use of federal funds for diversity and inclusion efforts, support of transgender clients, and use of “harm reduction” strategies that seek to reduce overdose deaths by helping people in active addiction use drugs more safely. And it gives preference for projects in cities, counties and states that ban homeless encampments.
The Newsom administration holds that the cuts undermine the goals of the California Statewide Action Plan, including reducing unsheltered homelessness and increasing permanent housing placements, housing retention, prevention, and production.
“Under both Democratic and Republican presidents, HUD’s Continuum of Care Program has helped states, local governments, and nonprofit organizations combat homelessness and provide safe, stable housing to our most vulnerable residents. This program has proven to be effective at getting Americans off the streets, yet the Trump administration is now attempting to illegally slash its funding,” said Attorney General Bonta. “As a result, for the 47th time in 44 weeks, I’m taking President Trump to court. Those caring for our unhoused neighbors need the federal government’s continued support. Absent judicial intervention, the Trump administration’s actions would only worsen the homelessness crisis.”
The cuts impact previously funded projects in the middle of a two-year funding cycle. Both lawsuits argue that the changes are illegal under the Administrative Procedure Act and the Constitution because they alter funding eligibility without authorization by Congress and did not follow proper protocols in notifying cities and counties of the change in rules
The Trump administration doesn’t expect to start awarding Continuum of Care money until May 2026. It’s unclear how the lawsuits will affect that timeline.
The Emerging 2026 Ballot Landscape
Even at this nascent stage of the election cycle, the November 2026 ballot is already anticipating a significant influx of propositions that are poised to accompany the gubernatorial race. The sheer volume of initiatives expected so early suggests a potentially crowded and highly contentious ballot next year.
This early activity is a strong indicator of various special interest groups and political organizations preparing to leverage the gubernatorial election's high turnout to advance their agendas. As the race for the state's highest office (hopefully) begins to take shape, it naturally creates a powerful coattail effect, drawing various ballot measures seeking to capture the attention of an energized electorate.
Currently, for the November 3, 2026 ballot, there are three qualified statewide ballot measures, two initiatives and referenda pending raw count of signatures, four circulating initiatives with 25% of signatures reached, 16 initiatives and referenda cleared for circulation, and 14 initiatives and referenda pending at the Attorney General's office. Below, we have outlined the measures that appear most likely to reach voters, however, we anticipate several more prior to next November’s election.
Qualified Statewide Ballot Measures
ACA 13 (Ward) Voting thresholds
Requires an initiative constitutional amendment to comply with any increased voter approval threshold that it seeks to impose on future ballot measures (including those appearing on the November 3, 2026 ballot). Guarantees in the state constitution the ability of local governments to submit advisory questions to voters.
Note: ACA 13 was originally scheduled to appear on the November 5, 2024, General Election ballot. However, Assembly Bill 440, Chapter 82, Statutes of 2024, provides that it will appear on the November 3, 2026, General Election ballot instead.
SCA 1 (Newman) Elections: recall of state officers
Eliminates the successor election for a recalled state officer and would provide, in the event an officer is removed in a recall election, that the office will remain vacant until it is filled in accordance with existing law. This constitutional amendment also repeals the prohibition against the officer subject to the recall from being a candidate to fill the office in a special election but prohibits the appointment of the officer subject to the recall election to fill the vacancy.
Fiscal Effects
- One-time costs of approximately $203,000 to the SOS for system modifications to California’s centralized voter registration database (VoteCal) to reflect revised recall procedures. VoteCal updates include design and coding changes to add a new contest type with unique processing and reporting requirements.
- Costs of an unknown, but likely minor and absorbable, amount to the Secretary of State and Controller to assume recall duties from another office.
SB 42 (Umberg) Political Reform Act of 1974: public campaign financing: California Fair Elections Act of 2026
Allows the state and local governments to offer public campaign financing programs, and triples the maximum potential fine for criminal violations of the ban on campaign contributions and expenditures by foreign entities.
Fiscal Effects
- Costs of approximately $205,000 in the first year and $198,000 annually thereafter to the Fair Political Practices Commission (FPPC) for one additional attorney position to accommodate an increase in advice requests related to the implementation of public financing programs and how such programs would impact existing campaign finance reporting and rules.
- The FPPC also anticipates additional enforcement costs of an unknown amount. Although this bill provides that the FPPC is not responsible for the administration or enforcement of a local public financing program, it is possible that a local agency itself may be subject to FPPC enforcement for improperly administering its local program. In such instances, especially if the FPPC needed to audit the jurisdiction’s financial records, enforcement costs may be significant.
Initiatives and Referenda Pending Raw Count of Signatures. If the statewide raw count meets or exceeds 100% of the needed signatures, the Secretary of State will notify county officials of the need to conduct a random sample verification. If the raw count is less than 100%, the measure fails, and proponents and county officials are notified.
Increases Ethnic Studies Requirements for Graduation from the California State University
Creates a new CSU graduation requirement for both undergraduate and graduate students to complete ethnic studies coursework. The new requirement must be added without increasing the total units needed for graduation. CSU must collaborate with faculty groups to develop core competencies by the 2030-31 academic year, when the requirement goes into effect.
Fiscal Effects: Initial implementation costs are estimated to be in the tens of millions of dollars annually, primarily for hiring new ethnic studies faculty to expand course offerings for roughly 90% of undergraduates and most graduate students who do not currently meet the proposed requirements. Costs are expected to decline over time as new ethnic studies courses replace other offerings, offsetting faculty and administrative costs.
Restricts Insurance Denials for Physician-Recommended Medical Care. Increases Insurers’ Potential Liability.
- Restricts insurers from denying, delaying, or changing certain doctor-recommended medical services or drugs if it overturns a licensed doctor's recommendation and could lead to specific negative patient health outcomes (e.g., disability, death). Any such action must be made by a licensed doctor on the insurer's behalf.
- A new cause of action allows people to sue insurers for these denials, delays, or changes. The insurer must prove the service was unnecessary or the action wouldn't cause a negative health outcome, meeting a higher burden of proof than typical civil lawsuits. Failure to meet this burden requires the insurer to pay triple the damages, plus costs.
Fiscal Effect
- The initiative's scope is uncertain as "health insurers" is undefined, making the number of affected entities (potentially including health plans and Medi-Cal) unclear.
- The measure will likely increase statewide health care costs, though the size is uncertain, as insurers may deny fewer services to avoid penalties, leading to higher premiums.
- State and local government health care costs are also uncertain, potentially ranging from hundreds of millions to billions annually, depending largely on the impact on Medi-Cal and employee health insurance premiums.
- State court workload and costs will likely increase, though probably not exceeding the low tens of millions annually, depending on lawsuit volume, which is influenced by the increased burden of proof for insurers and the possibility of triple damages. The increase could be mitigated if insurers cover more services to avoid lawsuits.
Circulating Initiatives with 25% of Signatures Reached. Once proponents of a proposed initiative measure have gathered 25% of the number of signatures required (currently 136,663 for an initiative statute and 218,661 for a constitutional amendment) they must immediately certify that they have done so under penalty of perjury to the Secretary of State.
Establishes Additional Voter Identification And Citizenship Verification Requirements.
- Requires California voters to designate a government-issued ID upon registration and use it to verify their identity when voting, either by presenting the ID in person or providing the last four digits of the unique ID number on mail-in ballots.
- Mandates new responsibilities for the Secretary of State and county elections officials, including annual reporting on citizenship-verified voter rolls and maintenance of ID information. County officials would be required to verify a voter's identity and ensure only one ballot is cast before counting. The state would also provide free voter identification cards upon request.
- Furthermore, the measure establishes a biennial audit by the State Auditor of all state and county election officials for compliance. Full implementation requires subsequent legislative action.
Fiscal Effects: Estimated costs range from tens of millions of dollars one-time to tens of millions of up to low hundreds of millions of dollars annually, depending on legislative and administrative decisions regarding voter ID card issuance, citizenship verification standards, and required expansions of state and county operations.
Limits Compensation for Health Care Executives, Managers, and Administrators
- Limits administrator (executive/manager) pay at most private and some public hospitals and physician groups to an initial cap of $450,000, adjusting annually for inflation. Exclusions include county-run hospitals and physician groups with under 25 employees. Violations incur three potential penalties (fines affect all entities, others only nonprofits), and taxpayers can sue to enforce the limit.
- The state could decide which penalties to impose, based on the circumstances of the violation and within certain limits. Taxpayers also could sue entities in court to enforce the limit and impose penalties.
Fiscal Effects: State enforcement costs are estimated at up to several million dollars annually, mostly covered by fees on affected entities. Lower administrator pay for thousands could cause uncertain but likely limited fiscal effects, such as reduced state tax revenue, potentially offset by increased staff pay, more hiring, or greater charity care.
Requires Community Health Clinics Spend 90% of Revenue on Program Services
- Requires nonprofit federally qualified health centers (FQHCs) to spend at least 90% of annual total revenue on mission-related services, defined by the Attorney General based on IRS reports. The Attorney General calculates compliance, and the California Department of Public Health (CDPH) enforces the mandate.
- Penalties for non-compliance include fines by the Attorney General for reporting failures and a penalty levied by CDPH for spending less than 90%. This penalty equals the shortfall and is initially paid to the state. Part of the penalty may be returned if the clinic achieves compliance and has an approved plan to spend the funds on mission-related services. Unspent penalty funds after five years go to clinic workforce programs. Exemptions are possible.
Fiscal Effects: Annual state enforcement costs of up to the low tens of millions of dollars for the Attorney General and CDPH, largely covered by fees and penalties on FQHCs. Since current data suggests most FQHCs spend less than 90% on mission-related expenses, the measure's overall impact is uncertain. FQHCs might increase services (potentially raising Medi-Cal costs) or close (shifting patients to public providers and increasing state/local costs).
Creates Loan Program For Middle-Income Buyers Of Qualified New Homes
- Authorizes the California Housing Finance Agency (CalHFA) to administer a new "middle-class homeownership loan" (second mortgage) program, funded by up to $25 billion in new revenue bonds. This second mortgage can cover up to 17% of a new home's sale price. CalHFA must set interest and repayment terms to cover investor repayment and administrative costs.
- To qualify, applicants must be state residents for one year, occupy the home as a primary residence, and have a family income no more than 200% of the area median income. They must also make a minimum 3% downpayment and secure a first mortgage.
- The loan can be used for newly built or newly repurposed residential properties, with the buyer being the first purchaser. Eligible homes have a maximum purchase price (e.g., $1 million-$1.5 million in 2025). Developers can choose a "qualified builder option" with higher labor/liability standards and different construction defect rules.
Fiscal Effects: The measure is not expected to result in direct state or local costs, as CalHFA's administrative costs and bond repayment are intended to be covered by the second mortgage payments. The program's impact depends on factors like investor demand and loan terms.
Grant Opportunities
Deadline: 1/23/26 17:00
Title: California State Duck Stamp Funding Fiscal Year 2026
State Agency / Department: Department of Fish and Wildlife
Match Funding? No
Estimated Total Funding: $1,939,000
Funding Method: Reimbursement(s)
Deadline: 1/13/26 23:59
Title: Community Engagement for the California Satellite Methane Project: Third-Party Administrator Grant Solicitation
State Agency / Department: Air Resources Board
MatchFunding? No
Estimated Total Funding: $4,750,000
Funding Method: Reimbursement(s)
Deadline: 1/31/26 23:59
Title: CDFA Pierce's Disease and Glassy-winged Sharpshooter Board Research and Outreach Program
State Agency / Department: CA Department of Food and Agriculture
Match Funding? No
Estimated Total Funding: Prior awards have ranged from $4,300 per year to $383,000 per year, with projects ranging from one to three years in duration.
Funding Method: Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning November 24.
December 3: 1.2 million fentanyl pills seized in 30 days thanks to CalGuard servicemembers
2.9 billion gallons of clean drinking water added to California’s supply with new investments
December 2: Putting safety first: California awards $140 million in road safety projects
December 1: Governor Newsom proclaims World AIDS Day
November 29: Governor Newsom celebrates Small Business Saturday, encouraging residents to support their community by shopping local
November 27: Governor Newsom proclaims Thanksgiving Day
November 26: California delegation wraps historic participation at COP30: new global partnerships, clean energy records, and climate leadership
November 26: Forget turkey, we’re thankful about salmon. How California is helping salmon bounce back.
November 26: This season of thanks, Governor Newsom announces six projects on state land to provide families with new affordable housing
November 26: Governor Newsom announces appointments 11.26.2025
- Clint Kellum, of Sacramento, has been appointed Director of the California Department of Cannabis Control.
- Julia Kingsley, of Sacramento, has been appointed Deputy Secretary for Environmental Policy and Housing Coordination at the California State Transportation Agency.
- Byron Lim, of Newark, has been appointed Encampments Program Director at the California Department of Transportation.
November 25: During National Youth Homelessness Awareness Month, Governor Newsom provides local funding to help strengthen housing access for foster youth
November 25: Governor Newsom sues Trump administration for cruel cuts to homeless housing funding that will hurt families
November 25: California issues update to reaffirm that vaccines are not linked to autism
November 24: Governor Newsom announces judicial appointments 11.24.2025
- Rise Donlon, of Tulare County, has been appointed to serve as a Judge in the Kings County Superior Court.
- Karine Mkrtchyan, of Los Angeles County, has been appointed to serve as a Judge in the Los Angeles County Superior Court.
- Robert Flory, of Orange County, has been appointed to serve as a Judge in the Orange County Superior Court.
- Ralph Robles, of Santa Clara County, has been appointed to serve as a Judge in the Santa Clara County Superior Court.
- Patrick Deedon, of Shasta County, has been appointed to serve as a Judge in the Shasta County Superior Court.
- Tahmina Morrow, of Colusa County, has been appointed to serve as a Judge in the Sutter County Superior Court.
November 24: While Trump turns his back on LA fire survivors, Governor Newsom issues order creating more flexibility for recovery and rebuilding
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