California’s mental health bond measure gathers steam as vote nears

Proposed changes to California’s mental health system and a $6.4 billion bond measure proposed in Proposition 1 continue to garner more support as the March 5 election draws near.

The proposition, which will be the only one on the March ballot, would use funds from California’s so-called millionaire’s tax to create more slots for people seeking mental health or substance abuse treatment and pay for supportive housing for mentally ill homeless people.

The Mental Health Services Act, approved by voters in 2004, imposes a 1% income tax on personal income over $1 million a year to fund mental health services. The proposition wouldn’t alter the tax, it just changes where part of the funding goes, and also reforms how mental health services are provided. It would divert 30% of the funding, or $1 billion a year, toward housing projects for mentally ill homeless people.

Homeless people in Los Angeles built a tarp tent ahead of storms last January. The state has the largest population of unhoused people, according to the U.S. Department of Housing and Urban Development.

Bloomberg News

Two-thirds of voters who responded would support Proposition 1, according to a December poll from the non-partisan Public Policy Institute of California.

The San Diego County Board of Supervisors, like Los Angeles County and San Francisco leaders, have come out in support of the bond measure.

The San Diego County supervisors voted 3-2 on Jan. 24 to approve a resolution authored by Supervisor Terra Lawson-Remer in support of Proposition 1 and other efforts to reform how severe mental illness is handled in the state.

The bond measure is expected to fund 6,800 new beds for mental health and substance abuse treatment and 4,350 new housing units, with 2,350 set aside for veterans. It would divert 30% of that funding, or about $1 billion a year, toward supportive housing for people with severe mental illness or substance use disorders.

“I am happy the resolution passed, and I hope our residents will do their homework on Proposition 1 before completing their ballots in March,” Lawson-Remer said. “Given all the changes we have made at the county when it comes to the way we deliver mental health and addiction treatment, we stand to benefit if Proposition 1 passes and the funding from the Mental Health Services Act is able to be reprioritized.” 

The target population for the increased services funded by the proposition are people with the greatest mental health needs, living in encampments, or suffering from substance abuse issues, Lawson-Remer added.

Board chair Nora Vargas said she supports the Proposition “because there is a broad coalition of healthcare providers and first responders, who think this is the right decision for our county.”

The measure isn’t without opposition — even from some supervisors.

San Diego County Supervisor Joel Anderson, who voted against the resolution, said during the council meeting he thinks the proposition will take money away from existing programs and “hamstring San Diego county’s own efforts” to serve its most vulnerable population by shifting funding out of existing county treatment programs and divert it back to the state budget.

“This sets us back, it doesn’t increase funding at all,” Anderson said. “I don’t want to spend more money that is clawed back by the state.”

San Diego County Supervisor Jim Desmond also opposed: “The discretionary portion of these dollars should be left to the counties. Unfortunately, we are going to get a one-size fits all from the state if this passes.”

At a rally at the Los Angeles General Medical Center for the measure earlier this month — that included mental health workers, Mayor Karen Bass and county officials — Gov. Gavin Newsom, a Democrat, said, “We can’t continue to do what we’ve done.”

Newsom has championed the measure even as he acknowledged the state and its largest cities have already spent billions on the problem without a noticeable reduction in number of homeless people, at least at street level. During his Jan. 11 budget presentation, Newsom said that beyond the bond measure, 2024 would be the year of accountability, pointing to lawsuits filed by he and Attorney General Rob Bonta against some California cities to force the localities to approve more affordable housing projects.

As of January 2022, there were 171,521 homeless people in the state, according to U.S. Department of Housing & Urban Development’s annual report. That number had grown to 181,399, when the 2023 report was released in December.

More than half of all homeless people in the country were in four states: California (28%, or 181,399 people); New York (16% or 103,200 people); Florida (5% or 30,756 people); and Washington (4% or 28,036 people), according to HUD’s report. Between 2007 and 2023, the number of people experiencing homelessness increased in 25 states. The largest absolute increases were in California growing by 42,413, and New York, up 40,599 people.

Los Angeles County Supervisor Hilda Solis called the measure a “beacon of hope” for the 76,000 Angelinos living on the streets, because it will get them off the streets and into treatment.

The new funding model would target the root causes of homelessness instead of merely treating the symptoms, Bass said, adding, permanent solutions have to target “why people ended up on the street in the first place.”

Opponents of the proposition argue it would disrupt the mental health services already being administered by counties. Californians Against Proposition 1 director Paul Simmons said in a release he believes the Mental Health Services Act is effective as is, and that building more behavioral-health beds is not the answer.

The $1 billion in diverted funds means significantly fewer mental health resources for counties, Simmons said, because Proposition 1 “doubles the state’s administrative costs for the Mental Health Services Act from 5% to 10%, sucking $140 million per year away from county-level services. Then Proposition 1 diverts another 30% of mental health program funding to other programs.”

“You cannot take away 35% of county-level funding for mental health without cutting community-based programs,” he added. “The simple fact is that Proposition 1 orders counties to do more with less money.”

The proposition would change the focus on how funding from the Mental Health Services Act could be used.

The counties receive roughly $10 billion to $13 billion per year in statewide taxes and federal money to provide mental health care and drug or alcohol treatment, according to a legislative analyst’s office report. If the proposition passes, it would reallocate $140 million per year of the $2 billion to $3.5 billion counties receive annually from the millionaire’s tax, the report said.

Currently 95% of the money from the millionaire’s tax goes directly to the counties to use for mental health services, according to the LAO’s report. If Proposition 1 passes, that would shrink to 90%. The state would use the additional 5% to pay the bonds. The proposition also requires the state to spend a dedicated amount of its MHSA money on increasing the number of mental health care workers and preventing mental illness and drug or alcohol addiction across communities.

The largest slice of the bond funding, $4.4 billion, would be used to build more mental health care and drug or alcohol treatment centers, according to the LAO report.

Of that amount, $1.5 billion would go to local governments and tribes.

The state would allocate the remaining $2 billion to local governments through grants or loans to turn hotels, motels and other buildings into housing and to construct housing for homeless people with mental health or addiction challenges.

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