Homelessness policy in California, and especially in Los Angeles County, is a failure by every measure, and the government doesn’t even know where the money went.
In March, the city of L.A. was ordered by a federal judge to pay for an audit of all homelessness spending and programs funded or operated by the city since early 2020.
In April, the state auditor reported that no one knows where or how effectively California has spent the “significant amount of additional funding” it threw at state-funded homelessness programs since 2021.
In May, the L.A. County Board of Supervisors listened to the CEO of the Los Angeles Homeless Services Authority read a PowerPoint presentation attempting to explain how LAHSA distributes its $848 million in annual funding from federal, state, county and city taxpayers, plus $2 million from philanthropy.
LAHSA is a city-county joint powers authority that exists as a pass-through organization to distribute the money from its “funders” to its “providers,” more than 100 nonprofit “partner agencies” that make all the decisions about hiring and contracting to provide homelessness services.
At their May 21 board meeting, the L.A. County supervisors heard from the leaders of service provider organizations along with LAHSA’s CEO and county officials about the immediate problem, which is that service providers are having to take out lines of credit to cover millions of dollars of bills every month while they wait for LAHSA to underpay them.
Everyone agreed that the payment system is broken, and you probably won’t be surprised to hear that everyone’s preferred solution is some version of pay more and pay earlier. The supervisors asked for a report on different options to achieve that. Later this month they’ll hear another PowerPoint presentation.
Right now, service providers pay their employees, contractors and expenses, and they send an invoice to LAHSA for reimbursement. Then LAHSA sends invoices to the various governments. When the money comes in, LAHSA pays the providers. By then the providers have borrowed money to pay for another month of services, so they’re still incurring interest charges, which the county does not reimburse.
The county fronts LAHSA “working capital” to avoid payment delays, but that apparently doesn’t work.
In truth, this system was never designed to work. It was designed to distribute blame so widely that it falls right off the edge of the spreadsheet and no one is held accountable for outcomes.
The scale of the service-providing system, and the accountability problem, grew exponentially with the passage in 2017 of Measure H, a temporary sales tax increase of 0.25% in L.A. County to pay for homelessness services. The system and the problem scaled up again with the flood of COVID relief dollars.
The COVID money is gone and Measure H expires in 2027. Supervisor Hilda Solis identified the elephant in the room. “We are soon going to be faced with going out to our voters again,” she said.
She probably shouldn’t have said that. The measure now headed for the November ballot, which would double the Measure H sales tax and make it permanent, is a “citizens’ initiative.” This gets it through the state Supreme Court’s “Upland” loophole, created by a 2017 case in which the court suggested that the constitution doesn’t apply to a “citizens’ initiative” tax increase, so instead of needing the constitutionally required two-thirds vote to pass, it only needs 50%-plus-one-vote.
If Solis and her board colleagues are the “we” putting the tax measure on the ballot, it needs a two-thirds vote.
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Either way, voters should just say no and force the county to answer hard questions. Should the government provide homelessness services directly? Should medical, behavioral and housing services be provided differently for better outcomes? Should the role of nonprofits and their highly paid executives be scaled back or eliminated?
The individuals speaking at the board meeting described their work as “a mission” but this missionary work has very worldly benefits. According to tax filings, the 2022 salaries of the top executives of those service providers were between $200,000 and $350,000. LAHSA’s CEO was hired in January 2023 at $430,000 per year.
This is an insane system that isn’t working. It’s time to scrap it and start over.
Write Susan@SusanShelley.com and follow her on Twitter @Susan_Shelley
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