California March 2024 Proposition Analysis
I know it’s coming out late (been pretty weak lately from the cancer and treatments and such) but with the election today I still wanted to get out a writeup on the one proposition on the ballot for California. While the proposition commercials present it as a rather simple proposition, it’s extremely long (over 60 pages) and has a lot of complex details which will take a bit of time to fully flush out. That being said, let’s get started.
Proposition 1 has two main components from a financial perspective; one a bond measure, and the other a redirection of tax revenue from the county to state level. The bond measure is $6.38 billion; $1.065 billion for housing for homeless veterans, $922 million for homeless people with substance abuse or mental health problems, and $4.393 billion to build treatment facilities and short term crisis facilities for people with mental health or substance abuse issues, with $30 million designated for tribal entities, and $1.47 billion designated for cities and counties. The total costs to the taxpayers for this would probably amount to about $310 million per year in increased spending for the next 30 years. As a point of reference, the state recently set aside $2 billion in the budget for building mental health care and substance abuse treatment facilities, and $3.7 billion for building additional housing.
On top of this, the proposition redirects some of the Mental Health Services Act funds, which currently provide about $2 -$3.5 billion of the total $10-$13 billion per year counties are given to pay for mental health care and substance abuse treatment, with roughly $140 million of those funds set aside for the state. This proposition would roughly double the amount set aside for the state, so an additional $140 million would be redirected from the counties to the state for spending.
The other main component of prop 1 consists of major changes to the Mental Health Services Act. Currently, local governments can spend their share of the $10-$13 billion as they deem appropriate, with some restrictions as to what constitutes legitimate spending for mental health care and substance abuse treatment. Proposition 1 would mandate certain percentages of their spending to go to certain areas. 30% would have to be spent on housing interventions, with half of that money going to programs for people who are chronically homeless. 35% would be spent on “Full-Service Partnership” programs, which would include a lot of the things we typically think of for mental health and substance abuse treatments, with a lot of popular buzzwords thrown into the text of the proposition. The last 35% would have to be spent with more of an emphasis on early intervention programs designed to prevent people from ending up homeless or with substance abuse issues to begin with.
Counties that have populations less that 200,000 would be able to request exceptions to these mandated percentages, since they might have unique populations with different needs.
There are also some changes in terms of who can sit on the boards that oversee these programs. Counties would typically have a board of 10–15 members, and half of those members would have to be either people who have received or are receiving care from one of these programs, or someone directly related to such a person (a parent or sibling or something along those lines). For some reason, a new requirement under this proposition is that 1 of those people is required to be 25 years old or younger. One person is also required to be an employee of a local education agency, so a teacher or something along those lines. The county is also encouraged (but not required) to have board members with experience with the behavioral health system, like a nurse or psychologist or something along those lines. So…need to have a young person on the board, but someone with actual medical or treatment experience is optional. Not sure if I get that logic, but that’s what the proposition states.
This proposition will have a lot of complicated impacts that are hard to anticipate. Because counties now have mandated percentages for how they are supposed to spend their funds, some counties might see some of their programs shut down as they start up new programs to meet the requirements. With the state taking additional money from these programs, there could be a decrease in available funds as well, although given the total spending, $140 million is a pretty small percentage.
Financially, with interest rates drastically higher than they were just a few years ago, now might not be the best time to take out additional bonds for projects. Given the state already has the budget to set aside billions for housing and treatment programs, it’s a little harder to make the case that taking out more bonds is necessary. For perspective, the state general fund budget in 2018–19 was just under $140 billion, while the governor’s current 2024–25 budget proposal has general fund spending just under $210 billion. A $70 billion increase in spending in just 6 years makes one think we’d have just a little bit of surplus available to spend on homelessness mental health/substance abuse programs without needing to take our bonds. Although they are talking about cutting billions from education spending this year, so maybe we don’t have that much of a surplus to work with after all. It’s hard to say.
If you think taking out these bonds and making these changes to the mental health and homeless programs is a good idea, vote yes on the proposition. If you think it’s not a good idea, vote no.
