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Enormous State Deficit Threatens Funding for Homeless Mental-Health Programs

Funds targeted for mental-health programs for homeless adults, because of passage of Proposition 63 in 2004, might be diverted due to the enormous state budget deficit, according to reporting in the San Francisco Chronicle.

The initiative Prop 63, known as the Mental Health Services Act, was passed narrowly by California voters in November, 2004.

With a beginning in January 2005, the proposition raises revenue by levying a 1% surtax on taxpayer income exceeding $1,000,000. Approximately $800 million was raised in budget year 2006-2007 by the initiative, according to the latest information available, at

The revenue is dedicated to develop mental health service programs including prevention, early intervention, education and training programs.

Republicans in the state assembly and senate are seeking to bridge an astounding $40 billion shortfall in the budget for the next 18 months without raising state taxes. To do this, they must seek expenditure cuts and inventive means to pump up general revenue.

But the Democrats and Governor Swartzenegger are very resistant to the minority party's stinting ideas.

According to the Chronicle article "Budget crisis may lead to $40 billion deficit":
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Democrats won't support [diverting Prop 63 and Prop 10 (a tax on tobacco used to provide healthcare for children) revenue].

"It's ironic that ... the first money they go after is for the homeless, mentally ill and kids living with mental illness," said Steinberg, who carried the legislation that led to Prop. 63. "That money is being well spent. This money is saving the system and saving people, and it's not a substitute for commitment to new and ongoing revenue."

Steinberg said he hopes a budget compromise can be crafted but hinted that Democrats may have to figure out ways to close part of the deficit with measures that require a simple majority vote.

"We are going to solve the problem. Together or not, we are going to solve the problem," he said.
[See Dec 17 follow-up SacHo blogpost, "State Republicans Target Homeless Mental-Health Services."]


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