A millionaire’s tax was helping fund new mental health programs in California. But the Great Recession changed things — and counties got desperate.
Nearly two decades ago, California voters passed a landmark tax on millionaires envisioned as a game changer for mental health.
Juan Luna, who suffers from mental illness, sleeps along Los Angeles Street in downtown L.A. Supporters of Proposition 63, approved by voters in 2004, promised the money would reduce homelessness and improve access to services for all Californians. Housemates Carrie McGinniss, left, Michael Allen, who both struggle with mental disorders, received housing assistance from a nonprofit to live in their apartment. The Mental Health Services Act, or Proposition 63, has generated $29 billion in total through a tax of 1% on incomes above $1 million., the money generated by Proposition 63. The act didn’t allow using the money to fund existing programs; it was meant for new or enhanced services.
Using the money for existing programs wasn’t the intent of the act, but “what do you do when the underlying mental health budgets are being cut everywhere else?” said Steinberg, who is now the mayor of Sacramento. The funding was never supposed to plug holes, said Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Assn., “but I don’t know what we would do without it.”
The Steinberg Institute, a public policy nonprofit that Steinberg founded, said state data show counties are currently stockpiling about $2 billion and that Los Angeles County alone had nearly $1 billion it had not spent as of this spring. In part, county officials said, that is because they often can convince state officials that the local government accounting is more accurate.
Up and down the state, county officials defend their stewardship of the money, saying they have done the best they can with available resources. Paul Stansbury, who lives in the South Bay, would concur in part. For decades, he has sought to care for his 43-year-old son, who suffers from schizoaffective disorder and drug and alcohol addiction. His son has benefited from programs created by Proposition 63, he said, including one in which a social worker, a psychiatrist and a medical doctor coordinated his care.
“Things have not gotten better since this ballot measure passed, they have gotten much worse,” said former Assemblyman Mike Gatto, a Democrat from Los Angeles.
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