The Governor Agrees To Some Changes In His BH Modernization Proposal

In response to concerns from counties and advocates, Governor Newsom has made some concessions in his plan to reform the behavioral health care system and the Mental Health Services Act, which would be renamed the Behavioral Health Services Act (BHSA). By channeling more funds into housing and treatment for the state’s most seriously ill and homeless residents, his original proposal drew criticism for jeopardizing resources for prevention and early intervention programs, especially for children and youth.

While still prioritizing services to address chronic homelessness, substance use disorders (SUD) and severe mental health issues, the amended proposal gives more flexibility to counties, sets aside money for children and youth services, and keeps the Oversight and Accountability Commission (OAC) that oversees the funds independent instead of incorporating it into the Health & Human Services Agency.

The Governor’s original proposal restricted how counties could spend MHSA money, requiring that a third of it go to housing assistance, a third to a “whatever it takes” approach for people who need intensive services, and the last third for all other programs. Counties argued that these spending constraints would leave less for crisis centers, capital improvements, outpatient services and other programs. They also noted that not every county can spend a third of their MHSA budgets on housing, as some smaller counties don’t have a large enough homeless population to serve.

The new proposal sets aside 51 percent of the funding in two areas to be used for people 25 and younger. That amounts to about 2 percent earmarked for youth prevention services and 8.25 percent for children’s early interventions. This is consistent with comments CAADPE had submitted to the administration in support of preserving the set-aside for youth prevention and early intervention.

The Health & Human Services Agency has also reiterated its commitment to broaden the target population served by the Act to include those with moderate and severe substance use disorders. The revised proposal still requires counties to incorporate SUD needs into the BHSA planning process, and provides the flexibility for these funds to be used for SUD primary or only conditions throughout the BHSA spending categories. However, it no longer mandates that counties expand dedicated funding to SUD services based on prevalence data.

To offer more local flexibility, the enabling legislation (SB 326) has been amended to let counties use a portion of the money designated for one category for other purposes. The amended proposal also:

• allows counties to transfer some money between spending categories like housing and prevention;
• offers small counties with more volatile year-to-year budgets exemptions from meeting some mandates;
• increases the amount of money allocated to the “flexible” spending bucket by 5%;
• expands the definition of housing interventions to include a wide range of social services like housing navigation rather than only “hard” costs like rent.

Despite these concessions, disability rights groups, peer support advocates, and many of the advocates who opposed the CARE Court legislation are still against this version of the modernization proposal. They want more assurances that the money won’t be used to place homeless people in locked treatment facilities against their will.

The revised plan will get its first full legislative hearing this week, when SB 326 (Eggman) is considered by the Assembly Health Committee. Lawmakers then would have four weeks before the end of the session to decide whether to place the measure on the March 2024 ballot.

In addressing the SUD conference last week by video, Governor Newsom reiterated that a major priority of his administration is a commitment to make significant progress in addressing homelessness, substance abuse and mental health problems in California.