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Why L.A. County is resisting Newsom’s mental health proposal

This was a voting effort born out of a lack of supporter expectations that Sacramento would fund the public mental health system.

Passed by voters in 2004, Proposition 63 creates California’s “billionaire tax,” a 1% income tax on the state’s richest, directing it to county coffers to spend on the mental health system. remitted.

Over nearly two decades, this tax has brought in an estimated $26 billion in revenue. That’s more than double his amount previously thought possible when lawmakers proposed the tax through a bill called the Mental Health Services Act.

Gavin Newsom, whose proponents agree he’s focused more on mental health than previous governors, says it’s time to “modernize” how the money is spent. That means spending 30% of that, or about $1 billion a year, on housing alone. For people with severe mental illness, substance use disorders, or both.

The carve-out of funds for housing is a fundamental change in how the county spends money, and perhaps some of it will go toward housing assistance, but Los Angeles County leaders say the administration is underfunded. I am concerned that this will lead to a reduction in services for adults and the elderly. Children who need the most care.

Newsom introduced two bills in June, Sen. Bill 326 by Senator Susan Talamantes Eggman (D-Stockton) and Congressional Bill 531 by Rep. Jackie Irwin (D-Thousand Oaks). contains the administration’s plan to change the way mental health funds are spent.

AB531 The less controversial of the two will include $4.68 billion in bond measures in the March 2024 ballot. This one-time fund will be used to create thousands of mental health and substance use disorder beds.

SB326 It has been the focus of much debate. A hearing is scheduled for August 16 before the Senate Health Committee. Both bills are tentatively scheduled for hearings before the Health and Housing Congressional Committees on Aug. 22, the same day that mental health advocacy groups are expected to mobilize to combat SB 326. If approved by parliament, the bill will be included in the March ballot and put on the table. Both can be amended, like any other law.

Let’s take a closer look at the how, why and history of this funding mechanism and the current debate between the Newsom Administration and Los Angeles County leaders about how the funds are being used.

Where did this idea for the Mental Health Services Act come from and why?

In the 1960s, there was a major movement in California and nationally to close asylums and treat people with severe mental illness in their communities. But California, like many other states, never fully funded a community-based mental health system, partly due to the lack of federal funding.

Over the next four decades, advocates and occasional legislators advocated reform and petitioned Congress for funding, but never succeeded in finding a dedicated source of funding that could withstand the test of time and recession. (This is unlike the education leaders who succeeded in passing Proposition 98, which established a minimum funding guarantee for education in the state constitution in 1998.)

This dissatisfaction led to Proposition 63, created by the Mental Health Services Act.

“The effort was necessary because mental health could not be a legislative priority to raise the necessary funding in other ways,” said the late Rusty Sellicks, a co-author of the effort. because it was clear,” he said. told the Little Hoover Commission In September 2014.

Mental health services and homelessness aren’t the top priorities they are today, and just over half of voters approved the bill, Sacramento Mayor Darrell Steinberg, who co-authored the initiative, said while in Congress. said in June.

Steinberg said counties have successfully enrolled tens of thousands of people in services through Mental Health Services Act funding.

“But the truth of the matter is that the time to modernize mental health services legislation is long past,” he says.

how much money are you talking about?

Lawmakers initially estimated the fund would generate $600 million a year. Steinberg said the fund’s budget ballooned because they didn’t anticipate how the money, or the number of Californians earning more than $1 million, would grow.

The Mental Health Services Act has poured $25.6 billion into California’s mental health system in the past 18 years since its inception, according to data provided by the Mental Health Services Oversight Board. The majority (95%) goes directly to the county.

LA County received $7.2 billion of this, including $873 million in 2021-22, according to data provided by the Mental Health Services Oversight Responsibility Board.

Excluding inflation adjustments, this is almost ten times the $89.7 million the county received in fiscal 2005-06.

California expects a whopping $4.7 billion in funding from the Mental Health Services Act in fiscal year 2023-24, and data provided by the Bureau of Legislative Analysis shows that Los Angeles County typically receives about a quarter of the total. have received. This is more than double the funding provided in the previous year. (billionaire well done Amid the COVID-19 pandemic. )

(Somewhat complicated but important note: The exact amount LA County receives has several caveats related to state fiscal practices, and the above figures are strictly an estimate of the income received by LA County each budget year. The state pays counties on a monthly basis using the following methods: It collects tax estimates and other data, and approximately one year later, the county receives a lump sum of the amount of taxes it would have received in the previous year. (For example, the County of Los Angeles is expected to receive about $1 billion more later this year from payments from previous funding cycles. Payouts are typically not this large.)

Voters approved this in 2004. How has LA County spent that money since then?

The Mental Health Services Act governs how the county uses funds, most of which are for consistent mental health care costs for adults and children with serious mental health needs.

Los Angeles County uses a portion of the funds to pay for a “whatever it takes” approach called “full-service partnerships,” in which the county contracts with health care providers to not only provide care but also to help patients Assisting in finding transportation to treatment, housing and work. and other support.

Lisa Wong, director of the Los Angeles County Department of Mental Health, said the agency spent about a third of its money last year on outpatient treatment for people with severe mental illness. She also funded a crisis response team, a team of mental health professionals who visit homes to help.This money also helped fund the county home teamwhere clinicians assist homeless people suffering from mental health crises.

Funds from the Mental Health Services Act were also used to fund street psychiatric teams that see patients in tents and sidewalks, capital improvements, and workforce education, among other things, Wong said. .

5% of the funds will be used to fund innovation. For example, the Los Angeles County Department of Mental Health plans to use the funds for new programs that place qualified mental health workers in shelters and temporary housing programs. The goal is to enable homeless people to participate in therapy services and other mental health care the moment they hit the streets.

What does Newsom’s plan include?

The Newsom administration’s plan would require counties to pay 30 percent of housing costs, including rent subsidies. Half of this money is required to be spent on people who are chronically homeless.

“We would be able to get people living in these tent camps, chronically homeless, off the streets without this kind of intervention, and without this intensive mental health and substance abuse support. We want to focus more on people who can’t get out,” Steinberg said. “If it’s a top priority for California, it should be a top priority for the state’s distinctive mental health laws.”

The plan also mandates that the dollar be used to treat people with substance use disorders, moving the money toward primarily treating people with mental health disorders.

Newsom’s proposal would eliminate carve-outs to innovation grants, and the government argues that those kinds of investments can continue to be made in treatment services and prevention funds.

California Health and Human Services Secretary Dr. Mark Gurley said the Mental Health Services Act only accounts for about 30% of total mental health costs in Los Angeles County, and instead the county pays for some of the care through the Medicaid program. He said it was worth considering.

For some children’s behavioral health services, for example, “many of them[programs]should be funded through the Medicaid system and not 100 percent directly from the Mental Health Services Act,” Gurley said. said Mr.

Administratively, it is easier for counties to use the Mental Health Services Act funds to pay for care. That’s understandable, but addressing this could free up money from the Mental Health Services Act for other services, such as housing, Gurley said.

The state has implemented some reforms to make it easier to pay for mental health care with Medicaid funds, he said. One of his new programs, California Advancing and Innovating Medi-Cal (CalAIM), helps pay for patient housing and food.

Gurley said the county is also using Mental Health Services Act funds to pay for care in locked facilities, care that federal law isn’t reimbursable for on Medicaid. Therefore, counties need to move away from this type of care. This is what the Newsome proposal is incentivizing through the proposed $4.8 billion bond facility, which will fund 10,000 new unlocked voluntary mental health and substance use disorder beds and housing. will be used for payment.

“All of this together creates more places for people to go, stabilize, recover and connect with their communities,” Gurley said at a press conference in June.

Why would Los Angeles County not want change?

Los Angeles County leaders fear that being forced to spend an extra 30% of their funds on housing costs will require cuts in outpatient services and other care.

In a letter to lawmakers, the county’s chief lobbyist, Marvin J. H funding ($500 million), said it did not consider. The county has to deal with the homeless problem.

Deon said the county has seen a 71% reduction in county spending on outpatient mental health services, crisis and emergency care services, outreach services, and other services due to redirection of funds, including 30% of housing funds. It is written that it is expected to mean that Several homeless services, including the HOME team.

In addition, the county recently used $163 million in Mental Health Services Act funds and an additional $85 million in local funds to obtain matching funding from the federal government, plus a portion of that as federal Medicaid for a total of $311 million. million dollars used. “We do not have $163 million in unallocated funds to replace MHSA stock to continue receiving this critical Medicaid,” Deon wrote.

The county also fears that the addition of a new category of patients with substance use disorders could mean thousands more to be treated unless Newsome’s proposal provides additional funding. are doing.

“I’ve looked at the numbers in every way I can and I still can’t find a way that this will fund the service at our current level, much less enhance it to the level I think. Let alone,” said Wong of Los Angeles County. “If you want to invest, I think it goes the other way.”

Any other critics?

Yes, the bipartisan agency that evaluates the Bureau of Legislative Analysis (policymakers’ ideas, especially when they involve money) found that the Newsom administration: could not provide The needs and expected positive effects of the plan are sufficiently clear.

“We found that the governor’s proposal would likely reduce countywide discretionary powers and reduce county spending on current programs.” written by an analyst. “We find the government’s justification for the proposed changes to be incomplete and raise some questions.”

Additionally, child mental health advocates are concerned about millions of people being diverted from services to housing. Reported by CalMatters.

Times staff writers Taryn Luna and Hannah Wiley contributed to this report.

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