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Transcript: Proposition 1 — Behavioral Health Funding

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A wide San Francisco with a tent encampment.
A homeless encampment located on Florida St in the Mission District of San Francisco, Calif. (Brittany Hosea-Small/KQED)

View the full episode transcript.

California’s primary is just around the corner, on March 5, 2024. This year, there’s a statewide Proposition on your primary ballot, but don’t worry we’ve got you covered. Prop. 1 asks voters two big questions: Should mental health funding be used for housing? And should the state borrow money to build more housing and treatment facilities? There’s tons of interesting stuff to dig into on this one.

Episode Transcript

This is a computer-generated transcript. While our team has reviewed it, there may be errors.

Olivia Allen-Price: California. Primary day is just around the corner on March 5th, and this year Californians have a lot to consider. We’ve got the presidential primary. Of course, there’s a contentious Senate race and lots happening on the local level. And then we’ve got proposition one all about funding for mental health care and housing for the state’s most vulnerable residents. Here’s how prop one will read on your ballot.

Voice Over: Authorizes $6.38 billion in bonds to build mental health treatment facilities for those with mental health and substance use challenges. It provides housing for the homeless.


Olivia Allen-Price: Now, there are two big questions being asked in this prop should mental health funding be used for housing? And should the state borrow money to build more housing and treatment facilities? There is lots of interesting stuff to discuss here. We’ll dig in just ahead on be curious. I’m Olivia Allen Price. It is always a pleasure when prop voting time rolls around, because it means I get to talk to KQED politics correspondent guy Maserati. Hey, Guy.

Guy Marzorati: Hey, Olivia.

Olivia Allen-Price: It’s been a minute, but here we are in a big election year. One of the first decisions that California voters are going to make is which way to go on prop one.

Guy Marzorati: That’s right. Proposition one is actually two pretty big ideas that are rolled up into one proposition. So it’s a bond measure. It’s also a reallocation of existing funds. So this was placed on the ballot by the state legislature because they need to go to the voters to get approval if they want to issue a bond. They also need to go to the voters to make a change to a ballot measure that voters previously approved back in 2004. So here we are.

Olivia Allen-Price: We’ll go step by step through all the moving parts of this one. But first, guy, can you walk us through the problems that proposition one is aiming to solve?

Guy Marzorati: Yeah. The big idea behind the proposition is focusing state dollars on people who are experiencing homelessness and who have severe behavioral health issues. So we know Californians who are experiencing homelessness. It’s not a monolith. You have people who maybe, you know, fell behind on rent, maybe people who are just looking for an affordable place to live. Prop one is not focused on those folks. But, there are a lot of people who are experiencing homelessness in California who have added challenges on top of that. UCSF did their massive study of the state’s homeless population. They found 27% of people living without shelter have been hospitalized for a mental health issue. They also found 65% of those people who are living without shelter have reported heavy substance abuse. These are the kinds of people who are prop one is aimed at helping.

So the idea is that of all the people in the state who are facing mental health challenges, these Californians, the ones who are living on the streets or at risk of living on the streets, are the ones who need to be prioritized. And so that’s where you get to kind of the political piece of all of this, which is that homelessness is a top priority for voters, especially kind of the visible suffering of people that you see on the streets. That’s become such a huge political issue, and it’s become a big issue for the man who is backing prop one. Governor Gavin Newsom, this is part of his kind of big swing to try to fix this issue.

Olivia Allen-Price: Okay. And broadly, what are we considering in proposition one?

Guy Marzorati: So voters are being asked if the state should borrow money to build treatment facilities, build supportive housing, and if it should also change how existing mental health money gets spent, mainly by using more of that mental health money to build housing.

Olivia Allen-Price: Let’s dig into the details a bit more now. Like we said a minute ago, this prop has sort of two arms. And I want to start with that first arm the bond. Now a quick bond refresher. A bond is essentially a loan the government takes out to fund certain projects. In this case, it’s a loan the state will pay back with interest over the next 30 years.

Guy Marzorati: Right. So prop one would allow the state to borrow money by issuing $6.38 billion in bonds. Most of that money, about $4.4 billion, is going to go towards building treatment facilities. Now, this is for, like we mentioned, the thousands of Californians who have mental health needs, who have substance abuse issues, who are at risk or are actually living on the street. So that could be kind of a short term crisis care facility or longer term, you know, residential facilities, rehab communities and even, you know, some outpatient services. So that’s about 4.4 billion.

Then the rest of the measure, roughly 2 billion, that’s going to go towards building affordable apartments that come with kind of onsite behavioral health services. Of that 2 billion. Now we’re breaking this down further. Of that 2 billion. About 1 billion would be specifically for veterans who have behavioral health challenges.  So again, we’re talking about helping people who are most visibly suffering, people who are having, you know, psychotic episodes on the street, people who are living in tents.

Olivia Allen-Price: So what is all this investment actually going to do?

Guy Marzorati: Supporters of prop one say by spending this bond money, they’re going to be able to create 4350 housing units, another 6800 treatment slots. Obviously, this is all a drop in the bucket for the overall homeless population in California, which is estimated to be more than 180,000 people. But again, the idea of prop one is a focus less focus on a subgroup of people who are experiencing homelessness. Newsom says prop one is the solution to the decades of unintended consequences that kicked off when California closed its state mental hospitals, but didn’t create alternative places for people to live and get care. Here’s Newsom.

Gavin Newsom: The reforms that took place in the late 50s, in the 60s and the 70s, that bipartisan endeavor around deinstitutionalization. We had a peak 37,000, beds in the state of California in the 60s, 37,000 beds. Today, it’s about 5500.

Olivia Allen-Price: We actually do have a Bay Curious episode about the closing of state mental hospitals and its impact on homelessness. We’ll put a link in the show notes and transcript for this episode if you want to check that out. Guy, is there more detail on how this money will be allocated, like specific projects or even how much would go to, say, Alameda County versus Los Angeles County or anything like that? Right.

Guy Marzorati: That all hasn’t been laid out yet. I will say Newsom’s chief of staff, toxic KQED last summer about this prop. She said the administration, even though this had just started to move towards the ballot, they’re already looking at locations to build or refurbish, potential places with this bond money. I think really acknowledging that the process of building anything in California just takes a really long time.

Olivia Allen-Price: [00:06:50] Another discussion for another time. I think it’s always worth remembering that bond money isn’t free if voters approve it. How will this bond impact Californians over time?

Guy Marzorati: Right. So California would have to repay the bonds back over 30 years out of the state’s general fund. That’s where all our tax money ends up. And that works out to about $310 million a year, which because we’re talking about a really massive state budget, it’s actually only about one half of 1% of the general fund. Now, the state would have to pay interest on top of all of that. So over the course of three decades, we’d pay about $9 billion, not adjusted for inflation, to pay back what is a $6.38 billion bond on the ballot?

Olivia Allen-Price: Okay, now on to the second arm of proposition one. So this measure would change how money collected for mental health services under Prop 63, which passed in 2004, is distributed. Okay. Start by taking us back 20 years to when voters approved the Mental Health Services Act.

Guy Marzorati: Yeah, this was really wild for me. Going back and looking at the coverage of that campaign back in 2004, because the issues that the supporters of Prop 63 were trying to address are so similar to what supporters of prop one are talking about right now. It’s basically a feeling that since those state hospitals closed, California really stopped providing the necessary care for people who have these severe mental health challenges. And the result has been those same people end up on the streets, in tents in our county jails. So what the Mental Health Services Act did back in 2004 was create this 1% tax on income over $1 million. It’s since been kind of colloquially known as the millionaires tax. And that created this new bucket of money that the state could use for mental health services.

Olivia Allen-Price: So voters passed the Mental Health Services Act, which generates between two and a half and $3 billion per year. And that money now funds about a third of mental health services budgets for counties around the state. What counties especially like about this money is they have a lot of say in how it gets used. There aren’t a lot of strings attached.

Guy Marzorati: Darrell Steinberg, who is currently the mayor of Sacramento back then in 2004, he was in the legislature and actually helped write the original Mental Health Services Act. He says the measure has been successful. It’s paid for a lot of services all across the state, from counseling to drop in centers to early intervention, having people come in to schools and classrooms and help teachers identify kids who might have mental health challenges. But he says the reason that all these years later, he’s now one of the leading supporters of changing it is because there hasn’t been enough focus on housing.

Darrell Steinberg: I think the counties have actually spent the money well, but what they haven’t done is spent it in a way that was focused on the most critical issues affecting our state.

Guy Marzorati: So the trade off that supporters of prop one are pitching to voters is basically, let’s give up the flexibility in how this money is spent in exchange for adding greater focus, specifically focus on housing.

Olivia Allen-Price: Tell me more about how they would limit flexibility that the counties have.

Guy Marzorati: So under prop one, if it passes, counties would be required to spend 30% of that millionaire tax money they get from the state, specifically on housing. So that could mean providing rental subsidies, building new housing, converting things like motels into housing with supportive services. So this would leave counties then with less money to spend on some of the other programs and services they’ve been providing in the mental health space. So they need to find the money elsewhere. Or in the case a lot of opponents are concerned about, they would need to scale back or cut some of these programs. Paul Simmons is one of the leaders of the No on prop one campaign. He recently led Depression and Bipolar Support Alliance California, which provides peer support for people with depression bipolar disorder. He says service providers in similar positions are really worried.

Paul Simmons: Adult respite centers and wellness centers are very, very much at risk. All peer support programs are just scared to death right now that they’re going to lose any funding they got from from the MSA funding.

Guy Marzorati: And you also have county governments who are really concerned about prop one, because right now they’re the ones that are getting this millionaires tax money. They are concerned that more of this money would go to the state. The state wants more say on how the millionaires tax money is spent. So you have many county supervisors who have come out against prop one. They’re concerned that if it passes, they’re going to have to cancel contracts with community based organizations or even perhaps reduce county staff.

Olivia Allen-Price: Right now, 95% of that million in our tax money goes to counties. What would that look like under prop one?

Guy Marzorati: Under prop one, it would be more like 90% with the state using its cut for things like increasing just the number of mental health care workers. And one other change I should note here is that counties under prop one would be able to spend some of this money on housing for folks who just have drug and alcohol addiction challenges, you know, substance abuse issues. They may not have a dual diagnosis, mental health issue. And right now, all the Mental Health Services Act funding under Prop 63, the millionaires tax, all of that has to be used for people with mental health conditions. This would actually change the name of the entire thing to the Behavioral Health Services Act.

Olivia Allen-Price: I see, so by calling it the behavioral rather than the Mental Health Services Act, it really broadens out the group of people who could be served by the money guy. Would this increase taxes for anybody?

Guy Marzorati: No. And this is actually what makes this kind of controversial. It doesn’t increase the millionaires tax that funds the current Mental Health Services Act. So opponents of prop one say you have the same pot of money. You’re just stretching it in all these new directions by trying to focus on housing. Now, supporters like Newsom will say, that’s not the whole picture. There are all these other initiatives happening, you know, like Cal Aim, which try to get, for example, health plans to pay for some of these mental health services that prop 63, the Mental Health Services Act, has been doing for the last two. Years.

Olivia Allen-Price: What else do opponents have to say about this one?

Guy Marzorati: So I think just like we broke down the measure into a couple parts, it might be helpful to break down where opponents are coming from on this pretty, pretty complex measure. So let’s start with the bonds. You have the state borrowing a lot of money to build these treatment facilities, supportive apartments. So you have conservatives, anti-tax groups like the Howard Jarvis Taxpayers Association. They oppose taking on that debt. And then there’s other conservatives who kind of jump on and say, we also don’t agree with the Housing First policy here, which is when someone with, say, a substance abuse problem is given housing before going through treatment.

And then there’s another piece of this, which is about what kind of housing can be built with this bond money, because prop one actually allows the money to be spent on locked facilities. These are, you know, places where people might get placed as a result of a conservatorship, where treatment is not voluntary. And this is pretty controversial. You get opposition not from conservatives on this, but you get opposition from groups like Disability Rights California, for example, who say these kind of lock facilities violate civil liberties and don’t have proven outcomes. Now, supporters of prop one say this is not going to be a huge piece of all the new facilities that get built, but that’s really an open question going forward.

Olivia Allen-Price: And what about the changes to how the existing prop 63 millionaires tax money is spent? Who is opposed to that?

Guy Marzorati: Yeah, that piece of prop one is opposed by some service providers, folks like Paul Simmons, who say if you’re focusing on helping people who are the most visible have the most acute needs, that’s a poor investment. If you’re taking that money from programs that try to provide help with mental health, substance abuse, when people are in school or when they’re in counseling.

Paul Simmons: But really, what they’re doing, from my perspective, is to take the money from the early intervention, take it from the upstream part and throw it all into downstream. You know, where people are having more trouble and in fact, forcing more people downstream.

Guy Marzorati: And so folks like Simmons are worried that if California puts less funding toward preventative upstream programs that support people you know, before their problems are most severe, we’re actually going to worsen some of the state’s problems.

Olivia Allen-Price: And who is in support of proposition one?

Guy Marzorati: Yeah, the biggest name in support is Governor Gavin Newsom. You know, for all the attention he’s gotten on political stunts, campaigning across the country, debating Florida Governor Ron DeSantis, the biggest policy focus he’s had in Sacramento has been at this intersection of behavioral health and homelessness. So just in the last few years, the governor signed bills to create care courts. So this kind of compels treatment, housing for people with severe mental illness. He also signed bills making it easier to place people in a conservative ship. Prop one is the latest step in that direction.

Gavin Newsom: This is, I think, the last big piece. We’ve got we’ve just we’ve radically changed the way we’re doing business. We created more flexibility, more tools, more accountability, more resources. Now we just we need more beds.

Guy Marzorati: And I think what’s notable about prop one is just the size of the coalition supporting it. So both these ideas, the bond measure and then these changes to mental health spending. They both passed with huge majorities in the legislature last year. Support from Democrats, support from Republicans. Now, you might say like, oh, when the governor comes out and says, this is my top priority, everyone’s going to get in line. But I also think it’s a fact that the broken status quo, we see people just visibly suffering on the street. That touches a lot of different parts of society. So you have, you know, leaders of California hospitals supporting this. They see many of these residents end up in their emergency rooms. You have groups representing firefighters, law enforcement behind this. They often get called to respond when someone is having a mental health episode. And then you have what might be the biggest group of backers, which are mayors. You know, they feel directly, you know, accountable to voters for what residents see on the street. And it’s why you have mayors like London Breed in San Francisco so vocally in support of prop one.

London Breed: I was just out in the Tenderloin and San Francisco, and it is clear that we need people to get the support that they need, especially those suffering from mental health and substance use disorder. Let’s get into campaign spending. What does it look like on this?

Guy Marzorati: Prop spending is very lopsided for this prop. You have supporters having raised more than $11 million to help push this measure through. Opponents, on the other hand, just about $1,000.

Olivia Allen-Price: Wow. So really kind of David and Goliath on the on spending.

Guy Marzorati: On the spending front for sure. Yeah.

Olivia Allen-Price: All right. Well, KQED political correspondent Guy Maserati, always a pleasure. Thank you.

Guy Marzorati: Thanks, Olivia.

Olivia Allen-Price: In a nutshell, a vote yes on proposition one means you’d like to see funds from an existing tax on millionaires used not just for mental health care, but also people facing drug or alcohol challenges. You’d also like those funds to be used for housing people needing mental health or substance abuse care. Finally, you’d like California to borrow $6.4 billion to pay for more mental health and substance abuse treatment facilities and housing.

A vote no on proposition one means you’d like to keep the Mental Health Services Act in its current form, and or you do not want California to issue that $6.4 billion bond.

All right. We really hope that helped you make sense of what you’ll be voting on. Again, Election Day is March 5th, but ballots should be in your mailbox soon if they haven’t arrived yet. If you found this episode helpful, do us a favor and tell your friends all about it or share it out on your social media accounts. Thanks.

We’re already gearing up for our full sized Prop Fest series during the upcoming general election. If you’ve got questions about a prop, another race, or any other voting issue in California, head over to Bay curious.org and use the form at the top of the page to send that question our way.

Bay curious is made in San Francisco at member supported KQED. Our show is produced by Katrina Schwartz, Christopher Bill and me Olivia Allen Price. Additional support from Jen Chen, Katie Springer, Cesar Saldana, Maha Sanford, Hollie Kernan and the whole KQED family. I’m Olivia Ellen Price. Best of luck in your decision.


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