Gavin Newsom’s plan to overhaul California’s mental health system heading to voters in March

California lawmakers endorsed Gov. Gavin Newsom’s latest plan to address the state’s worsening homeless crisis. Now, it’ll be up to voters.

“I was deeply moved by the personal stories that so many legislators have shared, showing how many of us have been touched by the mental health crisis,” Newsom said in a statement Thursday night. “These measures represent a key part of the solution to our homelessness crisis, and improving mental health for kids and families.”

The Legislature overwhelmingly passed a pair of bills on Thursday that will form a $6.4 billion bond measure on the March 2024 ballot to overhaul how the state treats mental illness, substance abuse and homelessness.

The goal of the measure is to roll back homelessness by expanding mental health treatment facilities, reducing encampments and holding local leaders accountable. It builds off last year’s passage of a plan by Newsom to compel people struggling with serious mental health issues — especially those living on the streets — into court-ordered treatment.

The ballot measure, first proposed by Newsom in January, consists of a $6.4 billion bond to add thousands of behavioral health beds and a package of reforms to revise how California pays for behavioral health care.

Up to $4.4 billion would go toward constructing, acquiring and rehabilitating more than 10,000 new treatment beds. The remaining $2 billion would pay for new permanent supportive housing for low-income Californians, including $1 billion earmarked for veterans.

The second part of the initiative would reform the state’s Mental Health Services Act, passed by California voters nearly 20 years ago to fund treatment. The law levies a 1% tax on personal incomes above $1 million and provides nearly a third of the dollars in the state’s behavioral health system.

Sen. Susan Talamantes Eggman, D-Stockton, carried that bill for Newsom and received unanimous support from her colleagues on the Senate floor.

“This is an issue that we can all agree on, that we must do better,” Eggman said. “And now, this gives us the means to be able to do better.”

That same strong bipartisan support was not given to the accompanying bond funding bill, carried by Assemblywoman Jacqui Irwin, D-Thousand Oaks. Several Republican lawmakers said the goal of the bill was laudable but the funding method was not.

“This is a huge problem — probably one of the biggest problems in the state of California — and yet it has not been made a priority,” Sen. Kelly Seyarto, R- Murrieta, said about homelessness. “We need to make it a priority for our regular budget, not incur debt.”

California Gov. Gavin Newsom listens during a news conference after signing bills in July. Lawmakers passed bills designed to bolster his plans to address mental health and homeless issues through a ballot measure in March. Renée C. Byer/rbyer@sacbee.com

How California funds mental health services

When initially passed in 2004, the law was hailed as a landmark measure that would greatly reduce homelessness while improving services to hundreds of thousands of Californians diagnosed with mental illnesses. Since then, homelessness in California has only worsened.

Newsom and supporters of his ballot measure say it’s time to update the law to address the root of the problem for many people living on California’s streets: mental illness or substance abuse.

The changes will limit the ways in which counties and service providers can use MHSA dollars, add accountability requirements to better track how funds are spent and mandate audits on the results of the state’s investments. As part of the revision, counties will be required to spend 30% of their MHSA funds on housing assistance.

Sacramento Mayor Darrell Steinberg, who wrote the Mental Health Services Act as an assemblyman, is a proponent of the changes. Steinberg recently told The Sacramento Bee that reprioritizing the spending of the funds was “appropriate” and “essential.”

The governor’s sweeping proposal faced immediate backlash from advocates, service providers and analysts who worried that the new housing mandates would jeopardize existing programs, especially those for children. Although opposition diminished as the governor made concessions to allow local officials more spending flexibility, some groups remain concerned the bill could lead to more forced commitments to locked treatment facilities.

“Basic human rights are being violated by the governor in his efforts to clear the streets and look good,” said Paul Simmons, executive director of the Depression and Bipolar Support Alliance of California. “This is not the answer. It’s more community programs, not less.”

The Bee’s Mathew Miranda contributed to this story.

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