Proposition 1 is a measure on the March ballot that would shift much of California’s millionaires tax for mental health services towards housing for people with mental illness.

It approves a nearly $6.4 billion bond to add more beds in psychiatric facilities as well as supportive housing, which is housing for formerly unhoused people that comes with mental health and other government services — also known as wraparound services — onsite.

It would also require counties to spend certain tax money they already collect toward housing programs, especially for those living in encampments or who have experienced homelessness for a long time.

A two-part proposal

The two-part proposal would create a $6.38 billion general obligation bond that Gov. Gavin Newsom’s office says would go toward funding thousands of treatment beds and supportive housing. Prop. 1 would also require California’s 58 counties to spend more tax dollars set aside for mental health treatment and prevention on housing.

A portion of Mental Health Services Act funding would be shifted from the counties to the state.

The official title: California Proposition 1: Behavioral Health Services Program and Bond Measure

What the measure would do

Proposition 1 would allow for $6.38 billion in general obligation bonds — a form of long-term borrowing that allows the state to repay the debt over several years through semi-annual payments. 

The state’s Legislative Analyst’s Office says the bond money would go toward building:

• More places for mental health care and drug or alcohol treatment 
• More housing for people with mental health, drug, or alcohol challenges. 

According to Newsom’s office, Prop. 1 would "expand access for hundreds of thousands of Californians, fund substance abuse treatment, and help get those suffering from mental health crises off the streets and into care.”

The LAO says up to $4.4 billion would be available for the state to build more mental health and/or alcohol treatment centers. About $2 billion would go to local governments to convert existing buildings into housing or construct new housing for people who are unhoused or are at risk of becoming unhoused, and have mental health, drug or alcohol issues. Roughly half of the $2 billion would be reserved for veterans.

How it would work

Prop. 1 would also reallocate billions of dollars generated every year by the Mental Health Services Act (MHSA), sometimes referred to as "the millionaires tax." According to the Mental Health Services Oversight and Accountability Commission, MHSA dollars fund nearly 25% of the state’s public mental health system every year. 

Under the proposition, the state would get an increased share of the MHSA funds (from 5% to 10%) while counties would receive 90% of the funds, down from 95%. The 5% increase for the state would amount to about $140 million annually, the LAO estimates.

Listen: Understanding Prop. 1

LAist's AirTalk program, which airs on 89.3, brought together a panel to discuss this proposition. Listen for a more in-depth conversation from supporters and opponents about this measure. The guests:

• Brooke Armour, executive vice president of the California Business Roundtable
• Susan Talamantes Eggman, state senator who helped author the original bill
• Susan Shelley, vice president of communications at Howard Jarvis Taxpayers Association
• Paul Simmons, former executive director of the Depression and Bipolar Alliance of California

One of the biggest changes the proposition would require is that counties spend 30% of MHSA dollars on housing programs. That would mean there could be less MHSA money for community-based organizations and possibly reduced county staffing, according to the California State Association of Counties and other groups.

Prop. 1 would also allow MHSA dollars to be used for treatment for substance use issues, and would change the name of the Mental Health Services Act to the Behavioral Health Services Act.

What people who support it say

Supporters say it is an overdue modernization of the state’s behavioral health care system. They say the proposition will retool how California spends billions of dollars annually on mental health and homelessness crises by focusing on the people who are the sickest and most vulnerable.

“This will prioritize getting people off the streets, out of tents and into treatment,” Newsom, a strong supporter of the measure, said in a statement.

Longtime mental health advocate Teresa Pasquini, whose son lives with a serious mental illness, said it’s time to make substantial changes — particularly in funding — to public mental health care.

“The way the money has been used has not been properly tracked, and it’s not been going to the population that I believe that voters intended it to go for, which was the most gravely disabled and seriously mentally ill of the public system,” she said.

The governor and others have also signaled that passing Prop. 1 is crucial to the success of California’s larger Behavioral Health Plan, which includes the recent launch of CARE Court in the state’s most populous counties and a new law that updates decades-old conservatorship law by expanding the criteria for involuntary treatment.

Who supports Prop. 1?

In addition to Newsom, the following politicians and organizations have been vocal in their support.

• L.A. Mayor Karen Bass
• California Hospital Association
• California Correctional Peace Officers Association

What people who oppose it say

Opponents say Proposition 1 will drastically reduce the funding counties have available for preventive services and will divert money currently used for peer-support centers, outpatient clinics and mobile crisis teams.

“It’s going to directly result in service cuts, this huge funding diversion,” said Karen Vicari, interim public policy director for Mental Health America of California. “For years and years and years the mental health system has been underfunded. It’s not a solution to move money around.”

Prop. 1 would also open the door to nearly $3 billion in funding for voluntary and involuntary behavioral health treatment facilities, according to the California Budget and Policy Center. Opponents are worried that would lead to more locked psychiatric facilities, which some mental health advocates say are unnecessary when other options exist.

“We firmly believe that if people have access to appropriate, culturally competent, accessible, community-based care, we wouldn’t need all of these beds," Vicari said.

Who opposes Prop. 1?

The following politicians and organizations have been vocal in their opposition.

• Californians Against Prop. 1
• League of Women Voters of California
• Mental Health America of California
• Disability Rights California

Potential financial impact

According to the LAO, Prop. 1 would shift roughly $140 million in annual MHSA funding away from counties and into the state budget. It would cost the state more than $9 billion to repay the total bond debt, or about $310 million annually over a 30-year period.

What Prop. 1 needs to pass

According to the California Secretary of State’s website: “A statewide ballot measure can be approved by a majority vote of the people.”

Further reading

• California Is Reinventing How It Deals With Mental Illness
• The Debate Around California’s Big Mental Health Bond Measure
• Newsom Rallies Support For Prop. 1 And More Mental Health Treatment Beds
• Understanding California Propositions