California mental health funding may get overhauled

Your guide to California policy and politics
Lynn La BY Lynn La April 3, 2023
Presented by American Property Casualty Insurance Association, Dairy Cares, Climate-Smart Agricultural Partnership and New California Coalition

California mental health funding may get overhauled

With little notice given to those working closely with the Californians who would be most impacted, a proposal announced by Gov. Gavin Newsom is once again leaving advocacy groups shocked and worried.

During his State of the State tour in March, the governor announced that he plans to reroute money from the 2004 voter-approved Mental Health Services Act toward behavioral health housing, reports CalMatters’ Kristen Hwang. More specifically, Newsom aims to help solve California’s mounting homelessness crisis by:

  • Diverting 30% (about $1 billion), of existing Mental Health Services Act money toward unhoused people who are severely mentally ill;
  • Using a bond measure to generate between $3 billion and $5 billion for 6,000 residential psychiatric treatment beds.

Money from the Mental Health Services Act makes up nearly one-third of all the state’s spending for behavioral health systems. It’s vital for counties because it allows them a lot of flexibility to address local needs — especially since other funding streams can be more restrictive and since Medi-Cal, California’s public health insurance program for low-income residents, does not cover behavioral health prevention.

Advocates and local service providers were initially blindsided by the news, similar to when they first learned about Newsom’s controversial CARE Courts proposal, reports Kristen. Those on the ground fear that existing programs will be cut and that this is yet another instance when the issue of homeless people with mental illness and substance use disorders — a portion that only makes up about 20% of all homeless people in California — plays an outsized role in the overall homeless and workforce crises. 

  • Christine Stoner-Mertz, executive director of the California Alliance of Child and Family Services: “One-third is a big chunk of money. The question in our minds is what is the approach and process to solving some of these problems. We would welcome greater partnership around that.”

Newsom’s proposal is supported by former Assemblymember and current Sacramento Mayor Darrell Steinberg, who co-authored the original act, and by Sen. Susan Talamantes Eggman, a Democrat from Stockton who co-authored the CARE Court legislation.

Still, this move is the latest example of a Newsom initiative eliciting shock and pushback from advocacy groups, such as when he cut funds for floodplains restoration in the San Joaquin Valley from his 2023-24 budget proposal — surprising environmentalists and policymakers alike.

In addition to the reallocation of the Mental Health Services Act’s money and bond measure, Newsom’s January budget also proposes to delay $1.1 billion in other behavioral health investments over the next two years.

But this doesn’t mean everything is set in stone — at least not until June.

A reminder: The state budget deficit for 2023-24 is projected to be between $22.5 billion and $25 billion. Budget hearings are underway to iron out finer details, with the Legislature coming back from spring recess on April 10. After that, Newsom will present a revised budget in May, using updated figures to crunch revenue numbers, including from tax filings. Throughout this process, budget funds can be recalculated or restored. 

One thing that could muck things up: Due to the severe storms and flooding that hit California starting in December, the Internal Revenue Service extended the deadline to file taxes for impacted Californians, and the California Franchise Tax Board followed suit. Instead of April 18, residents of nearly all 58 counties can file their taxes as late as Oct. 16

That means the revised May budget — which the Legislature must pass by June 15 and Newsom must sign by June 30 — likely won’t be as accurate as usual, since the updated revenue totals still won’t include people who have not filed taxes by that time in May.

For the record: This item has been updated to make clearer that the Mental Health Services Act money is separate from the state’s general fund budget.


California’s water crisis, explained: Despite the atmospheric rivers and devastating floods, the state isn’t flush with water. CalMatters has a detailed look at how California might increase its water supply, and a dashboard tracking the state’s water situation.

Now we have a version of the water explainer especially made for libraries and community groups, as part of the CalMatters for Learning initiative, which already has segments on state government and wage theft. And you can submit questions in English, or Spanish.


1 Feds OK state’s zero-emission truck rules

Members of the media stand beside an electric Actros truck at the booth of German truckmaker Daimler Truck at the IAA Transportation fair in Hanover, Germany, on September 19, 2022. Photo by Fabian Bimmer, Reuters
Members of the media stand beside an electric Actros truck at the IAA Transportation fair in Hanover, Germany, on Sept. 19, 2022. Photo by Fabian Bimmer, Reuters

It isn’t quite big, blaring breaking news, but a just-announced federal waiver is a necessary step for California to require cleaner-fuel big rigs on the road.

As expected, the U.S. Environmental Protection Agency on Friday granted permission for the state to enforce a first-in-the-world rule, adopted in 2020, that forces manufacturers to ramp up sales of zero-emission trucks and buses over the next 15 years. An estimated 300,000 trucks powered by electricity or hydrogen must be on California roads by 2035 and 100,000 by 2030.

According to Newsom’s office, the state has committed $5 billion for the transition to cleaner trucks and buses, and eight other states are moving in a similar direction, as is a 27-country coalition that California is leading.

  • Newsom, in a statement: “This is a big deal for climate action…. We’re leading the charge to get dirty trucks and buses — the most polluting vehicles — off our streets, and other states and countries are lining up to follow our lead around the world.” 

These waivers by federal regulators for California’s emission rules were routine prior to the Trump administration, which tried to eliminate them, but failed. The 1972 Clean Air Act grants California the authority to set its own vehicle standards, and since then the EPA has routinely granted these waivers so California can set its own course in cleaning up its polluted air. Other states and the EPA then move in and adopt California’s standards.

Next month, the state Air Resources Board will consider a more controversial proposal to strengthen the existing rule by banning all diesel trucks and requiring all new trucks to be powered by electricity or hydrogen beginning in 2036. 

Some environmentalists are pushing for an aggressive timetable, noting that pollution from toxic diesel fuel more often affects impoverished, immigrant and ethnic communities. 

  • Mike Young, political and organizing director of California Environmental Voters, in a statement:This is a massive win for everyone, especially for our frontline communities that are bearing the brunt of truck pollution and are often ignored. It is our collective responsibility to lower carbon emissions as quickly and equitably as possible.”

Electric vehicles: CalMatters is publishing a series on California’s road to electrify its fleet of cars and trucks. Starting in 2035, no new gasoline vehicles will be sold in the state. Do you have questions about this transformation? Submit them here.

2 Woe is San Francisco

A pedestrian crosses an empty intersection in San Francisco financial district at evening rush hour on May 7, 2020. San Francisco county has announced they will maintain shelter in place orders through the end of May. Photo by Anne Wernikoff for CalMatters
A pedestrian crosses an empty intersection in San Francisco’s financial district at evening rush hour on May 7, 2020. Photo by Anne Wernikoff, CalMatters

Even before the 2020 start of the pandemic, there was no shortage of op-eds and articles lamenting the apparently terrible state of San Francisco. The reason for the city’s shortcomings varied from basic government incompetence (in 2009), to being too wealthy (in 2014), to being too gentrified (in 2016 and again in 2019), to all of the above.

But when COVID-19 hit — disrupting local economies, shutting down schools and closing businesses around the world — major cities across the U.S. experienced a mass exodus. San Francisco was no exception and for a time, it was as if there was always a new piece (or book!) about leaving San Francisco or how it was a failed city. It seemed that for more than a decade, San Francisco was “forever dying,” as SFGATE put it.

Understandably, for every article there would be pushbackcounter narratives that praised the city’s resilience

But a wave of headlines in the last few days about the city’s failings appears to take a more acute approach — an acknowledgement that San Francisco is indeed losing a lot of money and a lot of people. Its vacant downtown financial district, which has truly been devastated by the pandemic, will also get worse if something isn’t done about it soon.

One suggestion, put forward by The San Francisco Chronicle editorial board, is to have the state intervene, similar to how the federal government and the state of New York stepped in to help resurrect Manhattan’s Financial District after the Sept. 11 terror attacks. Soon enough, the district recovered

So should California, or the federal government, do the same for San Francisco? While the future of San Francisco remains unknown, the fate of the city and its economic, cultural and financial standings are intrinsically tied to the fate of California. But if San Francisco wants to improve, the Chronicle editorial board argues, it must ease its bureaucratic restrictions and “stop getting in its own way.”

  • The San Francisco Chronicle, in the editorial: “For too long, San Francisco has been so backward-looking as to make it impossible to move forward. This is at odds with the innovation and creativity that the city takes pride in, and which it needs to foster and unleash if it wants to escape its current mold: a city preserved — stuck — in the resin of the pandemic.”

CalMatters Commentary

CalMatters columnist Dan Walters: Gavin Newsom claims victory in his crusade against the oil industry, but regulating the prices Californians pay for fuel will be very tricky.

A new law requires regulators to emphasize lower-income households in reviewing community solar proposals, but they need to act quickly to capitalize on billions in federal funding, write Alexis Sutterman, energy equity program manager at the California Environmental Justice Alliance, and Assemblyman Chris Ward, a San Diego Democrat.

When the entire food supply chain is considered, farms are not the biggest water user, responds Mike Wade, executive director of the California Farm Water Coalition.


Other things worth your time

Some stories may require a subscription to read

Governor signs order for those hit by Tulare Lake flooding // The Fresno Bee

CA is safe from Texas judge’s ACA ruling, commissioner says // San Francisco Chronicle

Collaboration at center of keeping students in school after juvenile detention // EdSource

SF expands program paying homeless individuals to return home // The San Francisco Standard

California lawmaker booted from committee after voting against gas profits cap // Politico

After conviction, praise pours in for Councilmember Ridley-Thomas // Los Angeles Times

Did the downtown mass shooting in 2022 change Sacramento? // The Sacramento Bee 

Martinez reels from refinery’s hazardous fallout // Los Angeles Times

Yurok tribe, fishing groups sue over water delivery to farms // AP News

Interim shelters are heralded as a CA homelessness solution. So why aren’t they working? // Mountain View Voice

Oakland restaurants struggling with crime // San Francisco Chronicle

L.A. County ends COVID-19 emergency // Los Angeles Times

Sacramento homeless encampment signs innovative lease // The Sacramento Bee 

What Berkeley homeowners want to build under SB9 // Berkeleyside

Amazon must face California lawsuit claiming its prices are too high, judge says // Reuters

See you tomorrow


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