California Voters to Weigh Behavioral Health Reforms After Newsom Signature

An ambitious plan to change how California funds mental health care will go before voters in March after Gov. Gavin Newsom signed a pair of bills Thursday to place the reforms on the primary ballot.

The changes to the Mental Health Services Act and a corresponding housing bond are aimed at helping Californians with severe mental illness while living on the street. The measures won overwhelming support in the Legislature despite concerns from California counties and some mental health advocates. Together, they represent Newsom’s latest effort to transform care at the intersection of mental health and homelessness.

The two bills Newsom signed on Thursday — Senate Bill 326 and Assembly Bill 531 — will appear on the March 5, 2024 ballot as Proposition 1.

“This was bipartisan legislation that we signed today, Democrats, Republicans — all of us impacted by the issue of mental health, mental illness,” Newsom said at a bill signing ceremony in Los Angeles. “So we’re very excited about the prospect of our success in March.”

SB 326 reworks the state’s Mental Health Services Act, first approved by voters in 2004. The MHSA places a 1% tax on personal income over $1 million to fund mental health care, along with services aimed at preventing mental health issues in kids and teens from becoming more severe.

Under the changes, the law would be renamed the Behavioral Health Services Act, and tax dollars could be used to treat substance abuse, in addition to mental illness.

Going forward, 30% of the act’s revenue would be set aside for housing, which could include temporary units or rental subsidies for Californians with acute mental health care needs.

“We all come to this with our own personal stories about the frustrations of knocking our heads against walls, trying to get people we love help,” said Sen. Susan Talamantes Eggman (D-Stockton), the bill’s author. “Well, now we have all the pieces together.”

The bill faced initial opposition from providers of youth mental health services, who argued the plan lacked clear set-asides to pay for early interventions — such as paying for mental health clinicians to come into classrooms and help early childhood educators identify issues with students. The plan was amended to include specific set-asides for early intervention and Californians younger than 25.

County governments remained skeptical of the bill. Tax revenue from wealthy Californians is a volatile revenue source, and directing more of that money toward housing could leave less funding for core mental health services.

“Counties have a significant and growing obligation to fund behavioral health services under the Medi-Cal entitlement and use MHSA funds to support that obligation,” according to the final Senate analysis of the bill. “This proposal leaves counties with fewer resources to do so, including less funding available to use as a Medi-Cal match to draw down additional federal dollars.”

AB 531 proposes a $6.38 billion bond, with the goal of providing 10,000 new beds and supportive housing units for those with severe behavioral health needs who, supporters of the plan argue, currently end up in emergency rooms or back on the streets.

Over $1 billion will be set aside for veterans with behavioral health needs. Supporters of the plan are promising community-based facilities, and not the locked state mental hospitals of years past.

Jolissa Hebard, an outreach supervisor with the National Alliance on Mental Illness in Westside Los Angeles, said she has lived with substance use and has relatives with bipolar disorder. She also has a son who has attempted suicide.

“The stuff that we are doing today is going to help families to help themselves and help their loved ones,” she said.

The Newsom administration pushed hard to win support for the mental health changes in the state Legislature and the governor will actively pitch his plan to voters next year, said Dana Williamson, Newsom’s chief of staff.

“If he were here, he’d tell you this is his biggest priority,” Williamson told KQED’s Political Breakdown last month.

Since taking office, Newsom has pushed for changes to how state and local governments deal with people suffering from severe psychosis or substance abuse — many of whom end up living in encampments on sidewalks or riverbeds.

Last year, the governor signed into law the CARE Court program, which authorizes judges to compel care and housing for Californians with severe mental illness. That law is rolling out this fall in eight counties before statewide implementation next year.

Earlier this week, Newsom signed a bill expanding the state’s conservatorship law governing the use of involuntary medical care.

Proposition 1 will be the only statewide measure on the March 5 ballot. Voters will also weigh in on primaries for president and California’s U.S. Senate seat.