The non-partisan Legislative Analyst's Office announced Wednesday the state will likely have a $25 billion budget deficit next year.
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The projection is a concern for local leaders as funding to fight homelessness has already been put on pause.
Regardless of if that funding comes through, local advocates say services will still be available for those in need.
Republican Assemblyman Vince Fong says Wednesday's report from the LAO was not surprising.
"I have watched and warned about the consistent spending and growing government programs with out any accountability and that that was going to lead to an unsustainable path." said Fong.
As vice chair of the State Assembly Budget Committee, he says this is a wakeup call.
"We can't continue in the direction that we're currently on and we're going to have to be fiscally prudent." Fong said.
The report says the revenue estimates represent the weakest performance the state has experienced since the 2008 Great Recession, but doesn't assume one will happen.
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If a recession does happen, the deficit will be even larger.
That's concerning for Fresno Mayor Jerry Dyer, who learned last week that Governor Gavin Newsom decided to wait to hand out the third round of Homelessness Housing, Assistance and Prevention grants.
"We're concerned, not only that the funds are being held back, but the manner in which it was done." Dyer said.
The governor's office says cities will now have to meet new requirements and provide more detailed plans.
Mayor Dyer says Fresno has been on track and deserves the money.
He says the city reduced the population of those experiencing homelessness this year by 13% and project an 8% reduction next year.
"No need to punish all of us as a result of a few cities that aren't, perhaps, providing the right projections for reduction." Dyer said.
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As state funding is up in the air for city programs, the Co-CEO of the Central California Food Bank Kym Dildine says they're looking at the potential long-term impacts.
The CEO of the Fresno Rescue Mission Matthew Dildine says its plans wont change because they don't rely on government funding.
Instead, they're teaming up with non-profits like the Central California Food Bank to launch City Center Fresno a one-stop shop for individuals facing homelessness, food insecurity, and other hardships.
"Until California really just decides that it needs radical change we're going to see an increase in homelessness, regardless of the funding." Matthew Dildine said.
Mayor Dyer will be meeting with Governor Newsom in Sacramento on Friday.
Both the Central California Food Bank and The Fresno Rescue Mission say regardless of government funding, people locally can make a difference.
You can donate money or volunteer your time.