Gavin Newsom wants to spend up to $6 billion on housing for mentally ill homeless

Beth Torres

Critics worry that existing programs will suffer if funding is diverted

California Governor Gavin Newsom has a plan to deal with two issues that have increasingly plagued the state: homelessness and mental illness. He wants to provide housing for the severely mentally ill, many of whom are homeless.

This sounds familiar. Didn’t states like California at one time have large-scale institutions for those with mental illness?

Yes, and some have suggested that the changes that have taken place have been part of the homeless problem. According to psychologist Divya Kakaiya,

“After the deinstitutionalization movement began in California in the 1960s, many state mental health hospitals closed, forcing many folks who needed a lot of care onto the streets.”

Perhaps we are coming full circle, moving once again toward institutionalization. 

Does Newsom hope to impact California’s homeless problem with this proposal?

It appears that way. The idea that homelessness is largely the result of mental illness and drug addiction, as I discussed in a recent NewsBreak article, is pervasive. According to CalMatters, however, a recent University of California San Francisco study suggests otherwise:

 “The largest survey of homeless Californians in decades aims to dispel myths about what drives that state’s most pressing crisis. It found that addiction and mental health conditions rarely cause homelessness.”

And the Governor acknowledged, at least in passing, the link between unaffordable housing and mental illness in his argument for his proposal (emphasis added):

“Newsom first announced his intention to change the state’s Mental Health Services Act in March, arguing that the law needs to be updated to reflect how high housing costs and highly addictive street drugs are affecting mental health and homelessness in California.”

How will this plan to increase housing for the mentally ill be funded?

Governor Newsom proposes two sources of funding:

  1. A bond measure to raise $4.68 billion
  2. Approximately $1 billion from California’s Mental Health Services Act. From CalMatters:
“Newsom announced his intent in March to divert nearly one-third of the state’s Mental Health Services Act money  — roughly $1 billion — to housing homeless individuals with severe mental illness or drug addiction.”

Is anyone objecting to this money being diverted from its original purpose?

What, politicians arguing about money? Actually, yes. Again from CalMatters:

“When Newsom announced his proposal in March, county behavioral health leaders countered that this money is the only funding source that gives them broad flexibility to focus on local priorities and any changes will result in program cuts. The money is “braided into the fabric of all things in our safety net,” said Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Association, at the time.”

What will be different if this proposal becomes law?

Housing. Specifically, much more housing for the mentally ill and addicted. About $1 billion of proposed funding will come from the existing 2004 Mental Health Services Act. The measure will divert 30%, or approximately $1 billion, per year from this revenue source for additional housing for this target population.

Unsurprisingly, this proposed diversion of tax revenue is already causing objections, as indicated above. But the bulk of the anticipated revenue will come from bond funding, which, if passed, will add billions of dollars of new debt to the state’s budget:

“The measure would authorize billions of dollars in bond funding to construct residential mental health treatment centers that would create beds for thousands of people. Newsom said he hasn’t settled on the final number, but is looking at requesting between $3 billion and $5 billion.”

Will California voters have the option of accepting part of this proposal while rejecting the rest?

It doesn’t look like it. Two bills have been introduced:

  • The bill authorizing the $4.68 bond funding was introduced by Assembly Member Jacqui Irwin, D-Thousand Oaks 
  • State Senator Susan Talamantes Eggman, D-Stockton introduced the bill to modify the Mental Health Services Act

If both bills pass with the required two-thirds vote

“...Newsom spokesman Brandon Richards said they will be combined into one ballot measure that would need to win a majority of votes to become law.” (emphasis added)

Here is a video by CBS Sacramento with a very brief summary of the proposal:

What is your opinion about this proposal?

Most of us, I believe, would prefer to see the “troubled souls” among us be able to receive the help they need. Ideally, a society with far fewer struggling individuals would be our best bet but we are a long way from that world.

So the question, as always, is whether this increase in government spending will achieve the promised results. Assuming the bills pass and the measure gets on the ballot, I expect much to be made of the fact that “no new taxes” are proposed — the existing tax revenue will be used differently. 

But the bulk of the revenue will come from the nearly $5 billion bond measure. As interest rates continue to rise, the impact of this much new debt on the state’s budget is likely to become significant.

You can let your fellow NewsBreak readers know in the comments if you have an opinion about this.

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