California lawmakers move forward with Newsom’s mental health housing push

Ashley Zavala | California Capitol Correspondent

A key committee in the Assembly on Tuesday moved forward with part of Gov. Gavin Newsom’s proposal to change the state’s Mental Health Services Act, an overhaul of a system that will require voter approval.

Since 2004, The Mental Health Services Act has collected money through a 1% personal income tax on California millionaires to fund mental health care services across the state. The tax last year raised nearly $5 billion and provides for about a third of the state’s mental health systems.

Newsom wants to change the way the money is spent, requiring most of it to be used on housing and services for those who are unhoused and severely mentally ill. The proposal requires each county to spend 30% of the funds alone on a housing for those who are severely mentally ill and either chronically homeless, experiencing homeless or are at risk of homelessness.

The Democratic-led Assembly Health Committee cleared the measure 11-0, with Republicans on the committee not voting. It next heads to the Assembly Appropriations Committee. “Californians know the urgency needed to address the crises our state and our country are facing, from opioids to mental health to homelessness.

The status quo is simply unacceptable,” Newsom said in a statement following the vote. “This reform will ensure our state has a true mental health care system that has real accountability so people can get help.” Newsom also wants voters to approve a $4.68 billion bond to fuel the effort.

Voters could decide whether to change the law and approve the borrowing in March. First, the proposal needs legislative approval. The issue was at the center of a nearly 8-hour long hearing Tuesday. “I think the time is now to consider these changes, consider how we can create the kind of flexibility counties have been asking for, and accountability Californians have been asking for in the pursuit for a system that has meet the need of those vulnerable,” California Health and Human Services Secretary Dr. Mark Ghaly told lawmakers.

Some counties have raised concerns the changes could disrupt services and take away existing, core mental health programs, including those geared toward children and crisis response. Many of the measure’s critics likened it to the expression “robbing Peter to pay Paul.” Ghaly said recent changes to the proposal provide for more flexibility with the use of the money.” I understand the need for additional housing, and fully support it,” Santa Cruz County Supervisor Zach Friend said. “We don’t believe it should be taken from another equally important pot in order to do it.

Right now, there’s a conflict between housing versus behavioral health versus homelessness instead of investing in all of them in a holistic way.” Other lawmakers raised concerns about redirecting funds from core services when the amount of money isn’t guaranteed year to year. The Legislative Analyst Office noted the MHSA tax is volatile, relying on millionaires whose incomes typically rely on the stock market and various economic conditions and not suited to support ongoing mental health services.

In the past five years, the state has spent about $20 billion on homelessness and housing. The latest data showed more than 172,000 people remain unhoused in California, with unhoused populations growing in cities like Sacramento and Los Angeles. The use of some of those funds is currently the subject of a state audit.

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