California Gov. Newsom is proposing a boost in mental health funding. Why children’s advocates are worried

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Come March, California voters will get the chance to weigh in on sweeping changes proposed by Gov. Gavin Newsom to the state’s mental health funding system — including a $4.68 billion bond measure to add treatment beds — but critics say the proposal pits children’s mental health services against the state’s ballooning homelessness crisis.

Newsom announced his intent in March to divert nearly one-third of the state’s Mental Health Services Act money  — roughly $1 billion — to housing homeless individuals with severe mental illness or drug addiction.

“We have to address and come to grips with the reality of mental health in this state and our nation,” Newsom said at the time.

The announcement was met with praise from legislative leaders and alarm by children’s mental health advocates who fear cuts to their services. Today Newsom’s office released long-awaited details.

Key changes to the Act include:

• Allocating 30% of the state’s Mental Health Services Act budget to housing those with severe mental illness or substance use disorders. Half of that money would be reserved for chronically homeless people;
• Directing 35% of the money to full-service partnerships, which provide 24/7 wraparound services like case management, clinical treatment and social supports;
• Earmarking 15% of money for early intervention programs and 5% for prevention programs. Eliminating the 5% innovation fund, which has historically been used to jumpstart programs for communities of color and LGBTQ folks;
• Making people with substance use disorders eligible for services;
• Adding 10,000 treatment beds if the bond measure passes;
• Adding $36 million to shore up workforce development.

About one-third of the county mental health infrastructure in the state is supported by the Mental Health Services Act, which was approved by voters in 2004 as a ballot initiative that levied a 1% tax on the state’s millionaires. Substantial changes to the act, like the ones proposed, are subject to further voter approval. Last year the tax generated about $3.8 billion.

Democratic legislators Sen. Susan Talamantes-Eggman, from Stockton, and Assemblymember Jacqui Irwin, from Thousand Oaks, authored the bills detailing the proposed changes.

Sacramento Mayor Darrell Steinberg said updates to the act are long overdue. Steinberg co-authored the original measure when he was an Assemblymember.

“I am 1,000% behind this modernization,” Steinberg said during today’s news conference.

The original intent of the act was to prioritize services for people “whose lives are most at risk,” Steinberg said, criticizing counties that currently “do their best to use nearly $4 billion annually  on people who need help, but without any clear state and societal priorities driving their investments.”

When Newsom announced his proposal in March, county behavioral health leaders countered that this money is the only funding source that gives them broad flexibility to focus on local priorities and any changes will result in program cuts. The money is “braided into the fabric of all things in our safety net,” said Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Association, at the time.

Children’s mental health advocates also said the new proposal details fail to address their earlier concerns about cuts to youth services, which include local at-risk youth centers, LGBTQ+ programs, school-based suicide prevention programs, and infant and early childhood mental health consultations.

“They don’t seem to have done any analysis on what they’re giving up to have this $1 billion for housing,” said Lishaun Francis, senior director of behavioral health at Children Now. “It’s an interesting time to make a change that seemingly shifts resources away from young people.”

Mental health among youth worsened during the COVID-19 pandemic, with one survey showing 63% of middle and high school students reported having had an emotional meltdown, 43% reported panic or anxiety attacks, and 19% described suicidal thoughts between April 2020 and March 2021.

In 2021, Newsom and the Legislature allocated $4.4 billion to a Children and Youth Behavioral Health Initiative, but people who provide services to young folks say that was a one-time investment — it doesn’t replace ongoing money they currently get from the Mental Health Services Act.