California's agency split adds $2 billion to taxpayers' burden
California divided one state agency into two separate entities, increasing the cost to taxpayers by roughly $2 billion.
Governor Gavin Newsom’s 2025 reorganization plan eliminated the California Business, Consumer Services and Housing Agency and replaced it with two separate bodies: the Business and Consumer Services Agency and the Housing and Homelessness Agency. According to the 2026-27 state budget, the new Housing and Homelessness Agency will require over $4.43 billion, plus roughly $17 million to dismantle its predecessor, while the Business and Consumer Services Agency will cost more than $1.5 billion, bringing total spending for the two agencies to $5.39 billion, up from $3.44 billion in the prior fiscal year.
The governor’s office declined comment, citing an older press release. Economists such as Wayne Winegarden and Orphe Divounguy questioned whether the split will improve efficiency or address the core issues of homelessness and business regulation. Former secretary Tomiquia Moss and new secretary Rohit Chopra did not respond to inquiries. Several legislators and experts also declined to comment.
Why it matters
Taxpayers will shoulder billions more for a government restructure that may not solve California’s homelessness or business challenges.
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