Proposition 64 Funds Can Close Gaps in Realignment and MHSA Funding and Structure

Proposition 64 (Marijuana Legalization) directs 60% of its funds to “Education, Prevention, Early Intervention and Treatment” for substance use disorders including related services such as mental health for youth and their families.

The measure includes a page or more of detail on how the funds “could” be spent, but from my reading this is the only specific limitation on how it must be spent. Youth is not defined, which leaves that up to the legislature which should define it as primarily ages 12-25 with prevention and early intervention for younger children and the “and their families” including parents.

The estimates on the amount of tax on marijuana sales revenues from this portion of the measure range from $300 million to $800 million – with $500 million as a best guess for the first year (2018-19). We then expect revenues to rise in future years.

This is a very significant level of new funding – nearly as much as the original funding from Proposition 63 of 2004 (The Mental Health Services Act) and more than half as much as the original mental health sub-account of 1991 realignment or behavioral health subaccount of 2011 realignment.

Realignment laws were not intended to represent significant new funding, but instead to provide guarantees of funding to counties and greater county control and responsibility over specified programs.

Proposition 63 of 2004 and Proposition 64 of 2016 both are tax increases with new funds and “non-supplantation” clauses to ensure that they are used to increase services and not to replace current funding.

When we were writing Prop 63, we wanted it to be comprehensive behavioral health funding.  However, through focus groups and polling voters made it clear that they would only support funding for “severe mental illness” and “prevention and early intervention.  They said funds could pay for substance use disorder treatment when it was a co-occurring disorder but not independently.

It is also an eligible focus for prevention and early intervention but that has not been implemented in any counties to the best of my knowledge.

Moreover, as we were writing the Act our focus was almost exclusively on funding for adult services.  Children’s providers said that EPSDT and AB 3632 provided the funding for their services so that their priority was to protect those entitlements.

Twelve years later, we now realize how much more is needed for youth and their families.  The decisions state legislators and state officials will make in the next 18 months regarding Proposition 64 represent our best opportunity ever to address these problems.  It is a window that will close once those funds are allocated so we must be prompt, inclusive and effective in our advocacy.  Here is what CCCBHA’s children’s adults and substance use disorders committees are proposing.

  1. Close treatment gaps and establish adequate capacity for full continuum of care

This is what most of the funding should be reserved for, and it should be allocated to counties through a need-based formula.  The Act suggests priority for school attendance areas with high dropout rates which probably tracks well with MediCal enrollment data.

To access these funds all counties should be required to have long-term and short-term expenditure plans which identify gaps in care (not covered by MediCal or commercial insurance) for youth and parents (which effectively means closing all gaps).

The primary focus is treatment of substance use disorders, but as the act specifies funds may also be used for other related supportive services including mental health, social services and transitional housing for homeless youth with substance use disorders.

The gaps in the continuum would include the need for diversion from jails and hospitals – a youth specific set of services and facilities.

Counties would be expected to commit portions of other funding sources including realignment and MHSA funds to integrate care.

Treatment models should also include integration with physical health and mental health.

Plans and funding would also be required to address workforce needs.

  1. Build prevention and early intervention (PEI) through school and college based programs that are integrated with mental health

Unsuccessful 2015-16 legislation AB 1025 (Thurmond), AB 1644 (Bonta) and SB 1113 (Beall) contained the elements for a multi-tiered school based mental health program.  Substance use disorders were not directly addressed but clearly in a PEI system youth being at risk or showing symptoms of either place them at significant risk for the other.

These Model Three tiered programs reflect the best approach to the social and emotional supports embodied in what the education community calls “multi-tiered systems and supports”

These bills were all approved in policy committees but were either held in appropriations or vetoed because of the lack of a funding source.

A portion of Proposition 64 funds should be reserved for county and school partnerships that provide matching local MHSA and school funds as start up for these programs – with the programs being sustained without additional Prop 64, school or MHSA funds as insurance, AB 114 (mental health special education) EPSDT, and Prop 64 and Organized Delivery System funds cover the treatment costs.  Other costs, such as those for school climate, are offset by savings in reduced high cost special education placements.

A similar approach for college students is contained in AB 2017 (McCarty) which was also vetoed. This effort can also now be funded through reserving a portion of Prop 64 funds for county college partnerships that provide college and MHSA matching funds for start-up with insurance and MediCal costs likely to make these programs self-sustaining.  AB 2017 also did not address substance use disorders but clearly an integrated and comprehensive approach is much better.

  1. State Oversight and Guidance

This is not realignment, so while counties are in the best position to coordinate and lead the expenditures of these funds, it is expected that state officials will have a significant oversight and guidance role.  We would expect there to be regulatory guidelines and funding conditions that would be established by state agencies or a new multi-agency commission focused on youth.


The authority to expend these funds begins with the 2018-19 fiscal year, but we would like to see legislation clarify the policies in 2017 and begin to set up the spending rules and guidelines in 2017-18.

County planning would begin in 2018 as by that time it is likely that we will know much more about how much money is estimated to be available and also whether and to what extent the gaps in funding have been exacerbated by cutbacks in federal funding and health insurance coverage mandates as many Congressional leaders are proposing.

What do others think?

As the leaders and drafters in the coalition which developed Proposition 63 CCCBHA has experience in promoting these types of new programs and in recognizing that our job is not complete.

We come to the Proposition 64 and Substance Use Disorders community seeking to partner with all other interested organizations and are interested to learn what people like and don’t like about what we have proposed and what other ideas people think should be considered in allocating these funds which become available on July 1, 2018.





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