‘We feel very violated:’ Gavin Newsom pushes mental health care changes over advocate concerns

Gov. Gavin Newsom’s plan to overhaul how California counties pay for behavioral health care is one step closer to going before voters in March — over heavy opposition from patient advocates, service providers and local government officials.

The governor in recent weeks has made a number of concessions in hopes of garnering more support and increasing the measure’s chances of success at the ballot box. But opponents warn that the plan, which is meant to secure more housing for homeless residents diagnosed with mental illnesses, will have unintended consequences for those seeking mental health and substance abuse services across the Golden State.

“We are worried about fixing a much larger broken system, which is the supply of affordable and adequate housing in our state, on the backs of our behavioral health system,” said Phoebe Bell, behavioral health director for Nevada County.

The California Assembly Health Committee on Tuesday voted 11-0 to move forward Senate Bill 326, authored by Sen. Susan Talamantes Eggman, D-Stockton. It would make a series of changes to the 2004 voter-approved Mental Health Services Act.

Assemblyman Jim Wood, chair of the Assembly Health Committee, thanked advocates for their feedback and expressed optimism about getting to an agreement.

“Twenty years ago, the mental health situation was very, very different,” Wood said. “And it’s important to modernize, to reflect the times that we’re in now and to move forward.”

MHSA levies a 1% tax on personal incomes above $1 million to fund mental health and substance abuse programs. Those funds represent nearly a third of the dollars in the state’s behavioral health system. Right now, most of the money goes directly to counties to use as they see fit.

SB 326 would require counties to divert some of that money to fund substance abuse disorders and put 30% toward housing assistance. The legislation would limit the ways in which counties and service providers can use MHSA dollars, add accountability requirements to better track how funds are being spent, and provide audits on whether the money is producing the desired results.

Newsom announced his plans during a January State of the State tour, saying the changes were necessary to adapt to California’s escalating homeless crisis. The sweeping proposal faced immediate backlash from advocates, service providers and analysts who worried that the new housing mandates could jeopardize some existing programs.

Children’s mental health advocates argued that the governor was forcing children and homeless residents to compete for services. They also contended that taking funds away from prevention services for youth would ultimately worsen the mental health crisis

Gavin Newsom’s administration makes concessions

As the voices in opposition grew louder, Newsom and Eggman made a series of amendments to the bill. Those include a mandate that 51% of dollars set aside for prevention programs go toward children and youth under the age of 26. The revisions also afford counties more flexibility to transfer some money between spending categories and provide an avenue for rural counties to seek exemptions from certain spending category mandates.

The amendments mark the latest instance in which Newsom has spent a hefty amount of political capital on big, splashy plans only to walk them back months later. His proposals to levy a windfall profits tax on oil companies and to expedite major infrastructure projects in California also went through some significant changes once they reached lawmakers.

Mark Ghaly, secretary of the California Health and Human Services Agency, challenged the premise that the administration compromised on the mental health plan.

“The good news about legislation is it comes together through a lot of conversations and feedback — and this is no different,” he said in an interview after the hearing.

Le Ondra Clark Harvey, CEO of the California Council of Community Behavioral Health Agencies, said that she was grateful that the administration took their feedback and made changes. But she, like many other advocates, is still worried the bill is too overly prescriptive.

“We are glad to see the movement there,” she said. “We’re just hoping to get closer to where we need to be to make sure that the system really operates on the ground level the way that everyone wants it to.”

Newsom is also hoping voters will approve a $4.68 billion bond measure on the March 2024 ballot to fund up to 10,000 new mental health treatment beds. Mayors from California’s largest cities wrote Monday asking the governor and legislative leaders to increase the bond amount to $6.2 billion and grant them the flexibility to decide how to use the additional funds in their own communities.

Mental health advocates harbor concerns

The amendments to SB 326 came after the Legislative Analyst’s Office estimated the housing mandate could result in a $718 million loss to existing county mental health programs. In a report released Monday, the agency stated that the amendments could help to “mitigate potential reductions in funding for current services.”

During a Tuesday joint hearing of the Assembly Housing and Community Development and Health committees, more than two dozen advocates sat in the audience wearing neon green shirts that read ‘No on SB 326’ and ‘SAVE MHSA.’

Community-based and peer-run organizations that opposed CARE Court — the mental health court program Newsom pushed through the Legislature last year — fear the governor’s latest proposal could cause more mentally ill people to be institutionalized and disproportionately harm people of color.

Susan Gallagher, executive director of Cal Voices, said Newsom’s administration has failed to include important stakeholders in discussions about the bill and is trying to jam it through the Capitol with little room for input.

Gallagher’s organization is a Northern California coalition of mental health patients, service providers and community members. She worries diverting funds and creating different use requirements will result in cuts to vulnerable programs.

“They keep talking about equity,” Gallagher said. “But guess where the equity lens starts? It starts with engaging the community before you make these changes. And they have not engaged any community before they made these changes. They dropped in on us. In fact, they unleashed it on us. And we feel very violated by that.”

Paul Simmons, executive director of the Depression and Bipolar Support Alliance, said he sees a concerning connection between CARE Court, SB 326 and another Eggman bill that would ease the conservatorship process.

Senate Bill 43, which is currently in the Assembly Appropriations Committee, would amend the state’s definition of “gravely disabled,” the standard used to determine whether mentally ill people are eligible to have another person take over their medical decision-making. It would take into account whether a person is aware of their mental illness and whether they can ensure their own safety.

CARE Court, SB 43 and SB 326 would collectively result in more institutionalization of mentally ill people, Simmons said.

Ghaly refuted that idea, at least in regard to SB 326.

”Nothing in the proposal supports additional use of funding in restrictive settings,” he said. “And in fact, if you look closely, all it does is really build up our ability to serve and resource those less restrictive settings.”

SB 326 will next be considered by the Assembly Housing Committee. Newsom is hoping to place the mental health bond and reform efforts on the March ballot as a combined measure. The bills will first need to receive support from two-thirds of lawmakers.

This story was originally published August 23, 2023 at 6:00 AM.