State Budget Reflects Healthy Economy and Increased Attention to Behavioral Health Issues

State Budget Reflects Healthy Economy and Increased Attention to Behavioral Health Issues

Last week the legislature sent the 2016-17 budget to the Governor with a record general fund spending level of $122 billion.  Revenues were a bit below what had been projected in January but still enough above the previous year to allow for some program increases as well as an increase in the state “rainy day fund.”

Housing to address homelessness and related increases in SSI/SSP payments were important parts of the budget for the first time in recent memory.

The most significant part for the behavioral health community is the proposed bond measure to commit $2 Billion of Proposition 63/Mental Health Services Act (MHSA) funds to supportive housing for people who are homeless or at risk of homelessness, and have a serious emotional disturbance or severe mental illness.

That proposal is in a “budget trailer bill” – AB 1618.  As an amendment to the MHSA, it requires a two thirds vote of legislators.  It has not yet been taken up on the floors of each house as it did not have the requisite support when other budget trailer bills were taken up last week.

CCCBHA has sent a support if amended letter to legislators.  We support the concept and see the value in a bond that can be used to leverage MHSA funds with other funding sources, so that there is more capacity to house and serve people who are homeless due to the neglect of their mental illness.  However, we are seeking amendments to ensure that counties must be able to show that they cannot only serve the population to be housed but also must maintain current services.  The ability to do both could be a challenge during the next recession depending upon how soon or strong it is and the extent of MHSA reserves in each county.

CCCBHA is also concerned about the “one size fits all” requirement of all funds going to permanent supportive housing that must be mixed with the general public. This type of housing is probably the easiest to combine with other funds so that more housing is produced, and so it makes sense that most of the funds would be for that housing type.  However, providers report that for some people with especially severe and disabling mental illnesses, some form of transition or bridge housing and some housing that is set aside just for people with mental illnesses is more effective, and often necessary.  We are asking that counties be allowed to designate a portion of their funds for those types of facilities.

Besides the housing bond, the budget includes $400 million for additional housing for homeless people, but the governor has conditioned his support for that proposal on the legislature passing a measure that eliminates local government use permit requirements for housing that is already zoned for multi-family use.  This anti-NIMBY proposal could be of great value in facilitating the siting of housing for people with mental illness.

In addition to legislative interest, more local government leaders are also taking action to support housing. The Los Angeles County Board of Supervisors and City Council and the Cities of San Francisco and San Jose are showing greater interest in support for housing to reduce homelessness.

The voice of local officials making homelessness a top priority will grow in December when Darrell Steinberg takes office as mayor of Sacramento. 

Since 1/3 of homeless have severe mental illness – and another third or more have substance abuse disorders – this attention on homelessness will greatly benefit the behavioral health community and its providers of service who are challenged to provide services for people who do not have stable housing.

Directly related is the legislature’s increased interest in finding alternatives to incarceration for people with mental illness.  The governor had proposed $250 million for local jail construction. The legislature rejected most of this proposal and earmarked $67.5 million for a new competitive grant program through the California Health Facilities Financing Authority (CHFFA) for mental health, substance use disorder treatment facilities and trauma centered treatment facilities.

CHFFA will also receive funds for new children’s crisis care facilities and services (partially funded from the criminal justice proposal and partially funded from state MHSA funds). This program covers a wide range of alternatives to hospitals and criminal justice placements that builds on a white paper that CCCBHA presented in 2015 and also complements the SB 82 (of 2013) program that funds alternative crisis diversion facilities primarily for adults.

With hospital emergency rooms overcrowded and findings that only one third of people taken there ever meet the Section 5150 inpatient criteria, the need for alternatives for people in crisis is finally getting long-deserved attention.  The goal is to replicate the system of Maricopa County (Phoenix) Arizona which reports 97% diversion through its crisis care system.  The program includes triage, crisis stabilization, mobile crisis, crisis residential, family respite and family training.  There will be competitive grants to counties with regional competition similar to the SB 82 program. Details will be developed over the next few months.

While not an issue in the state budget, all of these efforts also complement the recently approved MediCal Section 1115 Waiver’s programs for integration of physical health and behavioral health and whole person care pilot programs.

Those programs similarly reflect the awareness that people who do not get the behavioral health care they need are at the highest risk of homelessness, hospitalization and incarceration.

If the state economy remains strong we should be able to continue to build on these successes in future years.



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