Editorial: Newsom’s mental health plan needs work before going to voters

It’s easy to see the appeal of the $4.7 billion mental health plan Gov. Gavin Newsom wants to place before voters next March.

The proposal is designed to provide in-patient treatment facilities and services for 10,000 homeless people with mental health and addiction disorders.

The problem lies with the way that the programs would be funded. A portion would be paid by taxpayers through a  new $4.7 bond issue on the upcoming statewide ballot. And Newsom plans to divert another $700 million annually from important mental health services currently provided by California counties using funding from a 2004 ballot measure.

As a report released last week by the independent Legislative Analyst’s Office warns, the Legislature needs to take a hard look at the overall impact of the governor’s proposal before voting to put it on the ballot. Getting people with mental health and drug addiction problems off the streets is a worthy goal. But the current county services play a crucial role in keeping them off for the long-term.

In 2004, California voters passed Proposition 63, the Mental Health Services Act, placing a 1% tax on personal incomes above $1 million to provide programs and services for the mentally ill. The annual funding, which was $3.3 billion in the 2022-23 fiscal year, fluctuates from year to year. Counties receive at least 95% of those funds to use largely at their discretion to help those with mental health issues. They set aside some funding in high-revenue years to offset shortfalls in low-revenue years.

Newsom’s plan would reduce the counties’ share of the Proposition 63 funding to 92%. And it would require that 30% of the counties’ share, or about $1 billion, go to housing of some form and that 50% of those funds be used on housing interventions for the chronically homeless.

That mandate could pit advocates for mental health services against advocates for the homeless and leave little discretion for counties to prioritize where the money is needed most. Counties fear they could have to make significant cuts to outpatient services, crisis response, outreach and early-intervention programs.

In June, state Sen. Susan Eggman, D-Stockton, and Assemblymember Jacqui Irwin, D-Thousand Oaks, introduced two bills (SB 326 and AB 531) to put the governor’s plan before voters. To pass, the bills need support of two-thirds of legislators.

The Legislature should heed the Legislative Analyst Office’s warning and examine to what degree the governor’s plan could negatively impact current services. Lawmakers need to understand the trade-offs, including:

• How the volatility of the Proposition 63 funding would impact mental health services and programs in down years.

• How the governor’s plan would mesh with existing and future mental health proposals being considered by the Legislature.

• How the proposal would impact individual counties in both urban and rural parts of the state.

Newsom made reducing homelessness one of his top priorities during his State of the State tour through California in January. It’s imperative that his plan be fully vetted before placing it before voters.