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"We just got news that our voucher for housing came through after so long and I'm really grateful,” said Daniel Mercado. “That's what I wanted for my kids for Christmas was for us to get our apartment and God blessed us with it.”

Julia Alamo said without the help she got from the Department of Homeless Services their lives would be in chaos.

"We'd be in the streets or in a train or under bridge and eating garbage,” said Alamo.

The family said they are calling on Governor Paterson to make sure that type of situation doesn't happen to other homeless people either.

"He needs to stop and think if that's his children would he want his children on the street, do we want someone to take away what they have now? I don’t think he'd want that,” said Mercado.

Governor Paterson's budget for next year proposes a cut of more than $11 million in state funding for homeless services.

"These are tough budgetary times and we all have to make tough budget decisions. Just like the city will make tough decisions, the state will make tough decisions,” said Department of Homeless Services Commissioner Rob Hess.

Those decisions are coming at a time when the number of homeless families is rising at a pace the city hasn't seen in a long time. Currently, 9,720 families are sleeping in the shelter system.

"In fact, in the past five months, July thru November, every single one of those months has broken the previous records for the past 25 years for new homeless families entering the shelters,” said Patrick Markee, Coalition for the Homeless.

The department of homeless services said most people looking for shelter won't notice much of a difference even with a smaller budget.

"We will continue in the City of New York to house everyone that needs housing as a result of homelessness. We will not turn anyone away,” said Hess.

"The numbers are beyond our control, good news is we can handle it,” said Mayor Michael Bloomberg.

Homeless advocates said as the recession gets worse it will be harder and harder to keep up with the needs of the homeless.

"Governor Paterson has proposed cuts that will make it incredibly difficult for those of us on the front lines to deliver lifesaving services and shelter to these new record number of people,” said Mary Brosnahan, Coalition for the Homeless.

The Governor's new budget is due early next year.