CalChamber-Supported Bills Will Help Provide Much-Needed Care for Severely Mentally Ill Californians

The California Chamber of Commerce is supporting a legislative package that proposes to transform California’s behavioral health care system and provide the resources needed to care for and house those with the most severe mental health needs and substance use disorders.

The package includes two bills, SB 326 (Eggman; D-Stockton) and AB 531 (Irwin; D-Thousand Oaks).

SB 326 would modernize and reform the Mental Health Services Act (MHSA), which was passed as Proposition 63 by voters in 2004. This legislation would expand services to include treatment for those with substance use disorders—in addition to prioritizing care for those with the most serious mental illness—providing more guaranteed resources for housing and developing a workforce, and continuing community support for prevention, early intervention, and innovative pilot programs—all with new and increased accountability for the money going into the programs.

AB 531 is a $4.68 billion general obligation bond to build 10,000 new treatment beds and housing units with support. It will create new, dedicated housing for people experiencing homelessness who have behavioral health needs and substance use disorders, with a dedicated investment to serve veterans, providing Californians experiencing behavioral health conditions a place to stay while safely stabilizing, healing, and receiving ongoing support.

Employers Are at the Front Lines of Social Crises

For residents of California, the three interrelated social crises of homelessness, untreated serious mental illness, and drug abuse have strained the social cohesion, undermined quality of life, and visited suffering on thousands of Californians. Among Californians experiencing homelessness, nearly 40,000 have a serious mental illness and more than 36,000 have a chronic substance use disorder.

California employers are at the front lines of these social crises, and many struggle daily to stay open and provide a safe and welcoming business environment for their workers and customers.

The Behavioral Health Services Act (BHSA) initiative in SB 326 and the bond funding in AB 531 are an ambitious response to the growing dysfunction manifesting on California’s streets and will provide the resources and accountability metrics necessary for a more effective response by service providers by creating and maintaining the housing and support services that are foundational for treatment to be successful.

It also broadens the population eligible for these services to include individuals with substance use disorders, which may be the predominate cause of homelessness and source of decay in California’s cities.

Proposition 63 Tax

The proposed legislation is complex and implicates historic state-local fiscal relationships and affects many programs stemming from the original passage of Proposition 63 in 2004.

These public policy overhauls, like the realignment and redevelopment examples, often take shape over many years. As such, the CalChamber is urging legislators to provide flexibility for counties with funds utilized for housing services to address regional differences but still sufficient to keep people in placements and recognize the reasonable reserve requirements that allow counties to maintain services in face of the volatility inherent in this funding stream.

In addition, the CalChamber says, the time may be right to consider a long-needed change in the structure of the Prop 63 tax itself. Unlike the other tax rates in the California Personal Income Tax, the brackets in the millionaire’s tax are not indexed. That is, the million-dollar tax threshold has never been adjusted for inflation.

As a result, the number of taxpayers who are subject to this tax has vaulted by more than 150% in just 15 years (2005 through 2020). Many of these taxpayers are one-time payers from the sales of a residence or a business. The Legislature should consider adding an indexing provision to this measure as the Prop 63 program is being overhauled.

Accountability Measures

The CalChamber is supportive of the accountability measures included in the proposal, especially regarding outcome metrics for state and county health services and programs.

The CalChamber is urging legislators to include in this or other accountability efforts all state and local funding devoted to resolving and addressing homelessness.

“Over the past decade, state and local agencies have committed tens of billions of dollars in new funding commitments to this problem: accountability and transparency should apply to all these efforts,” the CalChamber said.