Newsom announces first $3.3 billion from Prop. 1 mental health bond

Fresh off proposing big cuts to housing and homelessness programs in the face of California’s massive budget deficit, Gov. Gavin Newsom was in Redwood City on Tuesday to announce that $3.3 billion from the state’s new mental health bond will soon go toward building more treatment centers and homeless housing.

It’s the first pot of money available through Proposition 1, the $6.4 billion bond measure voters narrowly approved in March. Local governments can begin applying for the funds in July, though it’s still unclear how much Prop. 1 money Bay Area cities and counties could receive.

On Tuesday, before a nearly completed state-funded treatment facility at the Cordilleras Mental Health Center campus just off Edgewood Road, Newsom said officials are working to push out the new money faster than ever before.

“We will move those dollars out on the first $3.3 billion in a matter of months, not a matter of years,” he said.

The Prop.1 bond money is estimated to fund 6,800 new treatment beds and 4,350 homeless housing units statewide. The two-part measure is also set to shift potentially billions of dollars already in the mental health system toward expanding intensive care programs and supportive housing, potentially leaving fewer funds for early intervention and other services. It will do both without directly raising taxes.

Local officials can use the money to build or expand a range of inpatient and outpatient treatment centers, from long-term residential care facilities for people in stable condition to locked-door clinics for those in crisis. New housing projects would have on-site services to connect residents with mental health care or drug counseling.

On Tuesday, Santa Clara County officials said they were still waiting for more details on how the state will distribute the funds.

Ahead of the measure’s approval, counties across the state raised concerns that the shifts in existing mental health funding could force the closure of some early intervention programs, such as suicide prevention or youth outreach. Disability rights advocates, meanwhile, worried that building new locked treatment facilities could lead to more wrongful involuntary detentions.

Still, Prop. 1 had bipartisan support among state lawmakers, who sent the measure to voters amid increasing public pressure to get a handle on homelessness. They’ve described Prop. 1 as the linchpin of an ongoing mental health overhaul crucial aimed in large part at compelling the most mentally ill homeless people off the street and into treatment.

“It’s time to treat everybody with dignity and the care that they and their families deserve,” Susan Talamantes Eggman, a Democratic state senator from Stockton behind a recent law expanding eligibility for court-ordered conservatorships, said at the press conference with Newsom.

California has an estimated 181,000 homeless residents, and while many struggle with addiction and mental health issues, experts say those with severe conditions make up a minority of the unhoused population.

At the same time that the new funding is set to go out the door, Newsom is also eyeing more than $1 billion in cuts to several affordable housing and homelessness programs to erase the state’s $27 billion shortfall.

That includes wiping away $260 million from a $1 billion grant program that helps cities and counties pay for a range of homeless services and housing programs. Newsom is also proposing $340 million in cuts over the next two years to a program that funds temporary housing for homeless people with serious drug and mental health conditions.

Additionally, his budget proposal does not include continuing the $1 billion homelessness services program beyond this year. The California Big City Mayors coalition — including the mayors of San Jose, Oakland and San Francisco — has called on Newsom and state officials to fund the program permanently.

Sharon Rapport, director of California policy for the Corporation for Supportive Housing, said while Prop. 1 includes $2 billion for new supportive housing, the majority of the money will go to new treatment facilities, meaning the bond shouldn’t be considered a replacement for the housing cuts.

“As soon as people are done with the treatment, they don’t get to live there,” she said. “That’s not housing.”