Alameda County Officials Will Dedicate Nearly $1B to Homelessness in Untapped Sales Tax Revenue

After a five-year legal battle, nearly $1 billion generated from an Alameda County sales tax can finally go toward solving its homelessness crisis.

The unanimous decision on Tuesday by the Board of Supervisors came amid some uncertainty over whether all the revenue would go toward housing and homelessness — as initially billed to voters, when the measure narrowly passed in 2020 — or if some should go to other county programs, such as mental health or violence prevention.

Ultimately, the board decided to allocate the vast majority of the funds to its original purpose, with a smaller portion going to other county programs. The 10-year half-cent sales tax has accrued about $810 million through June, according to county officials. Those funds will continue to grow through 2031, and officials estimate they could generate a total of more than $1.8 billion, with roughly $1.4 billion dedicated to solving the county’s homelessness crisis.

The windfall comes amid federal reductions in other safety net programs, such as food stamps and Medicaid. At the state level, Gov. Gavin Newsom signed a budget late last month, which includes no new funding for a key statewide homelessness grant program in the current fiscal year.

Local leaders argued that the recently released cash from Measure W puts Alameda County in a unique position to continue progress on housing people experiencing homelessness.

“We haven’t made a dent in the last 20 years, 10 years,” Board President David Haubert said. “We have more needs than we have resources, which is why we have to be smart about the dollars that we’re spending.”

According to Alameda County’s most recent count, more than 9,400 people were estimated to be experiencing homelessness in the county, but for the first time since 2013, that number has declined — down 3% compared to 2022. Unsheltered homelessness declined even more — 11% during the same time frame.

“We realize that the Trump administration means that there are significant cuts that are coming your way,” Oakland City Council President Kevin Jenkins told supervisors at the meeting. “All of you guys represent an area where people are literally dying in our streets. And so we have the resources with Measure W to start getting people off the streets.”

The measure had been held up in litigation after the Alameda Taxpayers Association sued the county, arguing it was actually a special tax, requiring a two-thirds majority to pass. Voters had only narrowly approved it with a 50.09% majority. Earlier this year, however, a judge ruled the measure was indeed a general tax and released the funds, which had been sitting in escrow.

San Francisco faced a similar battle over Proposition C, which voters approved in 2018 and was subsequently tied up in litigation. In 2020, the state supreme court ruled the tax was valid and could be implemented as originally promised. Earlier this year, Mayor Daniel Lurie announced plans to reallocate some of the funds from homelessness prevention programs to interim shelters.

When Measure W was presented to Alameda County voters, officials estimated it could generate $150 million per year. Since the tax started collection in July 2021, its revenue has mildly exceeded expectations, generating a little more than $160 million per year. County officials expect future years will yield roughly $170 million for the duration of the tax.

The board agreed to allocate 80% of Measure W funds to the county’s Home Together Fund, which is used for a wide range of services, including acquiring and maintaining temporary and permanent housing and providing services for people experiencing or exiting homelessness. And if the tax generates more than $170 million in a given year, any additional funds would also go into the Home Together Fund.

The remaining 20% of Measure W’s revenue will be set aside for safety net programs, including food security, behavioral health care and senior services. And, following a recommendation from county staff, the board created a $170 million reserve, which the county can dip into if economic conditions worsen.

While Alameda supervisors adopted guiding principles for how the fund will be allocated on Tuesday, the granular allocations will be decided at a special meeting next Wednesday. In the meantime, cities are vying for their piece of the pie. Oakland’s newly elected mayor, Barbara Lee, campaigned on a promise to get her city’s fair share of Measure W funds. More than half of Alameda County’s homeless population lives in Oakland, despite its residents making up only a quarter of the county’s total population.

“As decisions are being made about where those dollars go, it’s important to ground those conversations based on the need,” Lee said at the meeting. “In Oakland, that need is urgent.”

Supervisor Nikki Fortunato Bas, who represents Oakland, agreed with Lee, while also emphasizing the need to address racial disparities in the county’s homeless population. According to county data, the largest racial group experiencing homelessness in Alameda County is Black. Black residents make up 41% of people experiencing homelessness, despite representing only a tenth of the general public.

“When it comes to Measure W, I do agree that we have to invest the funds where there is the most need,” she told KQED. “And we have to work towards eliminating those racial disparities.”

But during the board’s discussion on Tuesday, Haubert challenged the idea that throwing money at the problem will actually solve it.

“In fact, I think it’s kind of the opposite — the more money you pour into something, the less urgency there is to actually perform,” he said. “I wanna see progress on things year by year, so I’d like to see us reallocate this every year based on what’s working.”