BREAKING: Los Angeles County’s newly formed Homeless Services & Housing Department is facing an alarming 25% funding cut for fiscal year 2026-2027, a move that providers are calling “devastating.” The proposed cuts, amounting to $219 million, were announced on January 13, 2026, and threaten essential programs aimed at reducing homelessness.
The county’s financial struggles stem from disappointing revenues linked to a downturn in consumer spending, which has severely impacted Measure A — the recently implemented half-cent sales tax intended to support homeless services. Authorities report a significant shortfall, with revenues dropping to just over $1 billion, down from initial estimates of $1.2 billion.
The funding crisis has led HSH Director Sarah Mahin to prioritize existing housing solutions, forcing cuts to successful outreach programs that help transition individuals from encampments to stable housing. “We are prioritizing the housing we have that is keeping people in housing today,” Mahin explained, emphasizing the dire need to avoid placing more individuals back on the streets.
The proposed budget cuts include a staggering $92 million reduction to the pathway homes program, which has successfully housed approximately 1,800 residents since its inception in 2023. Supervisor Hilda Solis expressed her outrage, stating, “It is a new department with (close to) a $300 million deficit. I know it is going to get tougher.”
Nonprofit organizations, including the Midnight Mission, have raised alarms about the impact of these cuts. “Seven unhoused people die every day in L.A.,” said Georgia Hawley, Chief Communications Officer at the mission. “If these cuts move forward, sadly, that number will grow.”
Despite efforts from Supervisor Lindsey Horvath to mitigate the budget shortfall, including securing a one-time state grant and eliminating service duplications, the overall reductions will severely limit outreach efforts. The budget proposal will be reviewed by the LA County Board of Supervisors on February 3, 2026.
Experts warn that halting successful programs could reverse the recent progress made in reducing the number of unsheltered individuals, which has seen a decline for two consecutive years. “We are shooting ourselves in the foot by reducing those services,” Solis said, highlighting the urgency for immediate action.
As the budget hearing approaches, local officials stress the necessity for cities to step up their efforts in addressing homelessness, as state and federal funding diminishes. With the stakes higher than ever, the community is urged to advocate for a budget that prioritizes the needs of the most vulnerable.
The effects of these proposed cuts will be felt immediately and profoundly, threatening to dismantle vital services that have proven effective in the fight against homelessness in Los Angeles County.
