In May, the hospital announced that it would not accept new patients, “for the foreseeable future,” although its emergency room and clinic remained open, the Riverside Record reported.

But emergency state funding announced this summer will help the rural hospital stay open, according to state Sen. Steve Padilla, a San Diego Democrat, whose district includes parts of the Inland Empire.

“In a time (when) our rural hospitals are facing financial hardship and potential closure, it is critical that the state step in to ensure all Californians have access to life-saving care,” Padilla said in a statement. “These hospitals are often the only source of healthcare for an entire community. Palo Verde Hospital is the only acute-care facility within a 100-mile radius, approximately a two-hour drive away – too far in case of an emergency.”

As Palo Verde Hospital had suspended admitting new patients in May, Rep. Raul Ruiz, a Palm Desert Democrat, called on Gov. Gavin Newsom to allocate $4 million in the state budget to keep Palo Verde Hospital afloat, the Desert Sun reported.

He called the looming closure a public health emergency that “puts lives at risk and would leave a massive health care gap in one of the most underserved regions of our state.”

State agencies stepped in, but didn’t provide as much as Ruiz requested. The state Department of Health Care Services expedited $560,000 in Medi-Cal payments to Palo Verde Hospital “to support hospital operations and protect access to care for the community,” the California Health and Human Services Agency told CalMatters in an email.

Last year the Department of Health Care Access and Information awarded the facility $8.5 million through the Distressed Hospital Loan Program, but there are no more funds available through that program. As a recipient of that aid, the hospital had to submit a turn-around plan that detailed how it would use these funds to stay solvent in the long run.

The hospital will also get an extension on repayment of state loans, enabling it to put that money to patient care instead of debt service, Padilla’s office told CalMatters.

El Centro Regional Medical Center in Imperial County, another desert facility in dire financial straits, received $28 million through the Distressed Hospital Loan Program last year and also recently got debt relief on that loan, state officials said. In July the El Centro City Council approved the sale of that facility to a bigger system, Imperial Valley Healthcare District, the Calexico Chronicle reported.

Palo Verde Hospital serves Blythe’s 18,317 residents, 2,600 inmates at Ironwood State Prison and thousands more in the region, Ruiz stated in a letter to Newsom. Without it, the closest medical care would be about two hours away at JFK Memorial Hospital in Indio and Colorado River Medical Center in Needles.

Ruiz said the hospital had faced a cascade of problems including litigation, operating system replacements, and a cyber-attack, which left the hospital with negative cash flow of about a $1 million per month.

The closure of Chuckawalla Valley State Prison in 2024 led to declining population in the city, and low Medi-Cal and insurance reimbursement rates also led to the hospital’s financial crisis, according to the Riverside Record.

It’s not alone. California’s rural hospitals have always operated on a thin margin, and several are on the brink of closure this year, Capitol & Main reported in June, adding that “California’s rural health care system has been financially precarious for years.”

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With initial results from all precincts, 56.8% of voters backed the bond measure, and 43.2% opposed it. Still to be counted are mail-in ballots not yet received and provisional ballots. Support for the bond broke 60% in Los Angeles, Alpine, Santa Barbara, San Francisco, Mendocino, Alameda, Yolo, Marin and San Mateo counties. Only counties in the state’s far north opposed it.

Proposition 2 was one of two $10 billion state bonds on the ballot; the other was Proposition 4 for funding efforts to abate the impact of climate change. Proposition 2 supporters had worried that voters might choose one over the other, but both passed easily.

“What has been clear is that people support it when they understand what Proposition 2 will do and its impact on schools,” said Molly Weedn, spokesperson for a pro-Proposition 2 campaign. “People are seeing the need in real time. When you have a leaky roof, it only gets leakier.”

The campaign, organized by the Coalition for Adequate School Housing (CASH), representing school districts and school construction interests that underwrote the effort, had not yet issued a statement Wednesday.

Even as enrollment in most districts is projected to continue to fall over the next decade, the need for unattended repairs and replacement of aging portable classrooms and buildings has mushroomed. The Center for Cities + Schools at UC Berkeley estimates that 85% of classrooms in California are more than 25 years old; 30% are between 50 and 70 years old, and about 10% are 70 years old or older. 

Climate change has exposed more of the state to unprecedented levels of heat and unhealthy air and underscored the need to replace aging or defective heating and cooling systems.  

The last state bond proposal, in March 2020, coincided with the emergence of Covid-19; anxiety over the virus contributed to its defeat as well as a majority of local districts’ construction bonds. Districts on the rebound from the pandemic were reluctant to ask voters to pass bonds in 2022.

Reflecting a suppressed demand for addressing facilities, a record 252 school districts asked voters on Tuesday to pass local construction bonds totaling $40 billion; an additional 13 community colleges proposed bonds totaling $10.6 billion. Thus, the demand for state help will far exceed the new funding.

Proposition 2, funded by the state’s general fund, needed a simple majority of voters to pass while local school bonds, which require increases in property taxes, require a 55% majority approval. A quick look at some of the larger proposals indicated voters were largely supportive, passing a $9 billion bond in Los Angeles Unified, a $900 million bond in Pasadena Unified and a $1.15 billion bond in San Jose Unified for upgrading facilities, with $283 set aside for housing for staff.

The portion of state funding for school districts will be distributed to projects on a matching basis, with the state contributing 50% of the eligible funding for new construction and 60% of the cost for renovations.

An estimated $3 billion in unfunded school projects from the 2016 bond measure, Proposition 55, will get first dibs at Proposition 2’s new construction and modernization money under the existing rules. Some of these projects have already been completed and will receive the funding retroactively. The rationale is that districts undertook the projects with the expectation that they would eventually receive state aid.

Once Proposition 2 runs out of money, a new line of unfunded projects will be formed for the next state bond. Interest and the principal for Proposition 2 will be repaid from the state’s general fund, at an estimated cost of $500 million per year for 35 years, according to an analysis by the Legislative Analyst’s Office.

How money will be spent

The $10 billion will split as follows:

• $1.5 billion for community colleges
• $8.5 billion for TK-12 districts, allocated as follows:
  • $4 billion for repairs, replacement of portables at least 20 years old, and other modernization work
  • $3.3 billion for new construction
  • $600 million for facilities for career and technical education programs
  • $600 million for facilities for charter schools
  • $115 million to remove lead from school drinking water

The portion of Proposition 2 for community colleges will help renovate existing buildings, construct new classrooms and even replace sewage lines. The chancellor’s office earlier this year already approved 27 projects — totaling about $709 million — that will be covered by the bond measure in a first round of funding. They include projects across the state, from Shasta College in the north to Imperial Valley College near the Mexico border.

Across the college system, with 115 brick-and-mortar community colleges, more than half of the buildings were built more than 40 years ago, said Hoang Nguyen, director of facilities for the system. 

“It’s not like we’re sitting on newer facilities or anything like that. Our campuses are older,” he said. “So this proposition would be of great help.”

The state’s largest district, the Los Angeles Community College District, got approval for four projects in the first round. That includes a new building to house Los Angeles Trade-Tech’s automotive technology, diesel technology and rail systems technology programs, as well as a new kinesiology building at Los Angeles City College. There will also be sewer replacement at Los Angeles Valley and Pierce colleges.

“We’d like to think that our students, if they’re learning in these beautiful new buildings, will feel motivated to complete their training, get their certificates and get an education,” said Leigh Sata, the district’s chief facilities officer.

The portion for TK-12 will set aside 10% of new funding for modernization and new construction for small districts, defined as those with fewer than 2,501 students. It will also expand financial hardship assistance in tiny districts whose tax bases are too low to issue a bond. The state will pick up the full tab for those districts.

The bond will also allow districts to seek supplemental money to build gyms, all-purpose rooms, or kitchens in schools that lack them. But, contrary to the wishes of early education advocates, it won’t dedicate funding to one of the most pressing needs that districts face: adding more classrooms or renovating existing space for transitional kindergarten students.

Except for the set-aside for small districts, Proposition 2 will continue allotting matching money on a first-come, first-served basis, which favors large districts and small, property-wealthy districts with an in-house staff of architects and project managers adept at navigating complex funding requirements.

It also won’t significantly provide a bigger state match for districts with low property values; many lack a large enough tax base to issue bonds to meet basic building needs. Data from the Center for Cities + Schools at UC Berkeley shows that property-wealthy districts, with more taxable property per student, have received a disproportionately higher share of matching state funding over the past 25 years.

One of the system’s outspoken critics is the nonprofit public interest law firm Public Advocates. Its managing partner, John Affeldt, said Wednesday that in passing Proposition 2, “Voters recognized the reality that so many facilities need significant modernization. But I don’t think voters are also aware of and approving the underlying distribution of the bond funds that send so many more dollars to high-wealth districts instead of low-wealth districts.

“We’ll continue to be a voice to make sure the state creates a system that equitably treats all its students,” he said.

EdSource reporter Thomas Peele contributed to the article.

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Two new bills would allow state funding to support sober housing — a significant departure from current law, which requires providers to accept people regardless of their drug and alcohol use. 

“If people want to get off of drugs and away from drugs, we should give them that option,” said Assemblymember Matt Haney, a Democrat from San Francisco who wrote Assembly Bill 2479. “They shouldn’t be forced to live next to people who are using drugs.”

There are at least 12,000 sober living beds in the state, but more than twice that many Californians who would qualify for those services, according to data from the California Research Bureau quoted in the Assembly Health Committee’s analysis of the second bill, AB 2893.

As state law prohibits spending housing funding on sobriety-focused programs, many are funded by private donations. 

The lawmakers behind the two bills say they aren’t trying to alter the key idea that everyone deserves immediate housing, even people struggling with addictions. Instead, they’re attempting to give more choices to people who want to be sober. But some experts worry that, because California has a shortage of homeless housing, people who relapse in sober housing or who don’t want to stay sober would have nowhere to go but back to the street. 

The bills come as California’s homelessness population is skyrocketing, having increased from about 118,000 in 2016 to more than 181,000 last year. Some critics blame and want to overturn the state’s inclusive housing policy. At the same time, as public fears about crime soar, voters in some liberal cities are putting limits on who can receive public assistance.

San Francisco voters this year passed an initiative mandating drug screenings for welfare recipients. In San Diego County, Vista Mayor John Franklin recently introduced a measure pledging not to support “any program that enables continued drug use” and criticizing housing first for precluding sober housing.

“I think we are seeing a cultural shift,” said Christopher Calton, a research fellow who studies housing and homelessness for libertarian think-tank the Independent Institute. “People are starting to say these permissive policies aren’t working.”

California’s ‘housing first’ homelessness policy

At issue is the state’s adherence to “housing first,” a framework where homeless residents are offered housing immediately and with minimal caveats or requirements, regardless of sobriety. The housing should be “low-barrier,” meaning residents are not required to participate in recovery or other programs. After someone is housed, providers are then supposed to offer voluntary substance use and mental health treatment, job training, or other services. The idea is that if people don’t have to focus all their energy on simply surviving on the streets, they’re better equipped to work on their other issues.

Housing first became law of the land in California in 2016 when the state required all state-funded programs to adopt the model. 

The federal government also uses that framework. But in 2015, the U.S. Department of Housing and Urban Development said requiring sobriety is not necessarily anti-housing first. California did not follow suit.

Some Republicans and conservative-leaning groups now are pushing to overturn California’s housing first framework, saying it hasn’t successfully reduced homelessness. Assemblymember Josh Hoover, from Folsom, is trying to completely repeal housing first with AB 2417. That bill has yet to be heard by a committee, and likely won’t advance this year.

But with more than 180,000 Californians lacking a home, even Democrats want to see changes. The bills by Haney and Assemblymember Chris Ward of San Diego would allow up to 25% of state funds in each county to go toward sober housing. 

Neither Democrat wants to upend housing first. Instead, they want sober housing facilities to operate under a housing first framework. Haney’s bill would require counties to make sure sober facilities kept people housed at rates similar to facilities without sobriety requirements.

Both bills specify that tenants should not be kicked out of their sober housing just because they relapse, and instead they should get support to help them recover. If a resident is no longer interested in being sober, the program should help them move into another housing program. 

Having a sober living option for people who want it would be a good thing — but it would have to be their choice, said Sharon Rapport, director of California state policy for The Corporation for Supportive Housing. But homeless housing is so scarce in California, that it’s unlikely participants would be given a true choice, she said. And, these bills would divert already limited state money away from low-barrier housing.

“My worry is that we have one pie of funding for housing,” she said. “So it’s not like we’re saying, ‘Let’s add extra money and try this other approach.’ We’d be saying, ‘Let’s spend less money on harm-reduction housing.’”

Her organization has not taken an official position on the bills. 

To make sure people don’t end up back on the street after a relapse, counties would have to keep spaces in low-barrier housing free, in case someone needs to move out of sober housing, Haney said. But that’s not explicitly mandated in the bill. 

One key motivation for Haney to draft his sober housing bill is the surge of deaths caused by the opioid fentanyl. 

“Our housing first policies in California do not reflect the realities of fentanyl and the need to provide pathways to get off of and away from such a deadly drug,” he said.

Overdose deaths are rampant inside San Francisco’s homeless housing, a 2022 San Francisco Chronicle investigation found. But the state doesn’t track those deaths in public housing, meaning if Haney’s sober housing bill passes, it will be all but impossible to tell whether it saves lives.

The state should track those deaths, Haney said, adding, “maybe I’ll do that bill next year.”

Does housing first work?

The argument against housing first is simple: Since California adopted the policy, the state’s homeless population has grown by more than half. 

But experts say that’s because high housing costs are pushing people onto the streets faster than the state’s overburdened supportive housing system can pull them back inside.

Under immense pressure to do something about the crisis, politicians are pointing to housing first as a scapegoat, said Ann Oliva, CEO of the National Alliance to End Homelessness. But that’s like blaming the emergency room for the number of COVID patients coming in during the pandemic, she said. 

Multiple studies have shown housing first to be successful. The Department of Veterans Affairs in 2010 found adopting housing first reduced the time it took to place people in housing from 223 days to 35 days. A two-year study in five Canadian cities found housing first participants spent 73% of their time in stable housing, compared with 32% for participants in non-housing first programs. 

People Assisting the Homeless (PATH), which operates housing first programs in Southern California and the Bay Area, reported 94% of people who moved in were still housed a year later. Destination: Home in Santa Clara County, which spearheads the county’s housing first efforts, reported similar results.

“That is as much evidence as I think would be necessary to show that this model works really well,” said CEO Jennifer Loving, “and the problem is we haven’t been able to do enough of it.”

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