Local mental health programs in California would lose an average of $230
million over each of the next two years from a psychiatric care reserve fund
if voters approve a new initiative this month aimed at closing the state's
Proposition 1E would shift a total of nearly $460 million over two years
from mental health care programs funded through a 2004 voter-approved measure,
Proposition 63. The idea for the transfer of funds was placed on a May 19
special election ballot by legislators as one of six propositions that aim to
help close a remaining hole in California's budget deficit that could exceed
The ballot measures are part of the budget Gov. Arnold Schwarzenegger (R)
signed in February that uses tax increases, spending cuts, and borrowing to
cover California's projected budget deficit through Fiscal 2009-2010.
The effort to redirect funds from the mental health account, which was
established in 2005 under the Mental Health Services Act (MHSA), is opposed by
the California Psychiatric Association (CPA) and other mental health advocates
because it temporarily would reduce or eliminate psychiatric programs for some
of the most vulnerable segments of the state's population.
Randall Hagar, the CPA's director of government affairs, said that the
mental health funding is a small part of the overall effort to close the
state's budget gap, but those funds are very significant for the counties that
administer public mental health care throughout California.
The MHSA funds "are huge in counties, and the ultimate impact of
their loss is unknown," Hagar told Psychiatric News.
Psychiatrists who see the need for the mental health funds every day in
their treatment of people with serious and persistent mental illness
"It's ironic that the [Proposition 63] initiative that did what many
consider the right thing by providing a dedicated source of funding now faces
reduction," said Marcia Goin, M.D., Ph.D., a Los Angeles psychiatrist
and former APA president.
The MHSA funds are generated by a special 1 percent state income tax on
individual income over $1 million. The funds pay for innovative mental health
programs and expanded county-provided mental health care. Among the goals of
the MHSA are increasing participation of patients and families in all aspects
of the public mental health system, expanding outreach to untreated
populations, and multiplying the treatment options available to people with
serious mental illness and their families.
Roderick Shaner, M.D., medical director of the Los Angeles County
Department of Mental Health, said the loss of funds could reduce or eliminate
many of the county's newer and innovative mental health programs. Such
programs include so-called bridge services that coordinate patient care
between needed general health care, psychiatric care, and substance abuse
treatment. Other MHSA-funded programs provide housing and employment support
services to people with mental illness.
"Many of these programs are designed to help reintegrate mentally ill
people back into the community in ways that could not be done prior to passage
of the MHSA," Shaner said.
The state was charged with distributing the MHSA tax revenues to county
governments, but due to a backlog in its disbursement effort nearly $2.5
billion remained in the fund during the winter 2008 to 2009 budget process.
That large amount of unspent funds proved irresistible to state legislators,
some of whom wanted diversion of the entire fund placed before voters. The
legislators eventually agreed to offer voters the option to redirect about 20
percent of the MHSA funds.
"This ballot measure was seen as a compromise by some," Hagar
But it is a compromise strongly opposed by CPA, which had a March council
vote to join "No on Prop 1E," a coalition of mental health
advocates, consumers, and unions that has been working to educate voters about
the unforeseen negative impact of redirecting MHSA monies. The coalition
maintains that the pending voter proposition began as an effort to permanently
move all MHSA funding and that its approval will open the door to the eventual
loss of all such monies.
Supporters of the temporary shift in MHSA funds, including California
Senate President Pro Tem Darrell Steinberg (D)—previously a leader of
the initiative that created the MHSA fund—counter that the loss of
psychiatric treatment funds is part of the sacrifice demanded of all state
residents to close a historic budget gap. Another ballot proposition that
voters will consider would temporarily shift $608 million from early childhood
health care and education programs to fund services for foster children and
children with developmental disabilities.
Voters appear divided on the mental health proposition. A mid-March poll by
the Public Policy Institute of California found that almost half, 47 percent,
of likely voters support Proposition 1E, while 37 percent said they would vote"
no." Three in 10 likely voters said the outcome on 1E is very
important. The survey interviewed 2,004 California residents, including 1,525
registered voters, 987 of whom were considered likely voters.
Even if voters approve all of the measures, the state's nonpartisan
Legislative Analyst's Office projects that an $8 billion budget deficit in
Fiscal 2009-2010 will continue to loom because state revenues so far are well
The proposed funding cuts also come as rising unemployment in California is
driving up state expenses for safety-net services, including Medi-Cal,
California's Medicaid program.
Defeat of the ballot initiatives could result in another battle in the
legislature over tax increases and program cuts. Goin said some mental health
advocates worry that the defeat of Proposition 1E will lead legislators simply
to cut other mental health services funded through the general budget.
Information on the "No on Prop 1E" coalition is posted