In his latest move to roll back California’s homeless crisis, Gov. Gavin Newsom unveiled a new plan Sunday to dramatically expand the number of treatment beds available for those living on the streets while suffering from mental illness or substance abuse.

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Newsom said he is pursuing a multi-pronged statewide initiative that would go before voters in 2024 to “modernize how California treats mental illness, substance use disorder and homelessness.”

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Part of the initiative would be funded by general obligation bonds to finance the construction of new community mental health facilities around California. They would be able to serve more than 10,000 Californians with mental illness and substance use disorders each year, according to a statement from his office.

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Secondly, the ballot measure would reform the state’s Mental Health Services Act (MHSA) — passed by voters as Proposition 63 nearly 20 years ago and used by counties to fund programs and services for residents with serious mental health issues.

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MHSA levies a 1% tax on personal incomes above $1 million and generates enough dollars each year to fund nearly a third of the state’s mental health system.

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Newsom wants to amend the legislation so that it covers the treatment of those with substance abuse disorders. It would also require at least $1 billion to be set aside annually for housing and residential services for people experiencing mental illness and substance use disorders.

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“This is the next step in our transformation of how California addresses mental illness, substance use disorder, and homelessness — creating thousands of new beds, building more housing, expanding services, and more,” Newsom said in a statement. “People who are struggling with these issues, especially those who are on the streets or in other vulnerable conditions, will have more resources to get the help they need.”

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As part of the governor’s plan, counties would also be subject to new accountability and oversight measures, though details were not available.

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The initiative would need to be approved by the legislature and passed by voters. Newsom’s administration did not announce a dollar figure for the bond measure.

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Newsom’s plan builds off of CARE Court

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Sunday’s announcement marks Newsom’s second major effort in the past year to reduce encampments by treating and housing people dealing with a combination of homelessness, substance abuse or severe mental illness.

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Last year, Newsom signed legislation to create a new civil court system — the Community Assistance, Recovery and Empowerment Court, or CARE Court — to compel residents struggling with mental health and addiction into court-ordered treatment.

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Opponents of CARE Court faulted the law for failing to guarantee housing for everyone who needs it. Newsom’s plan for a 2024 ballot measure seems intended to address those criticisms.

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Senator Susan Talamantes Eggman, D-Stockton, co-authored CARE Court and has worked with the governor to craft the ballot initiative, according to Newsom’s press office.

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Concerns about California’s Mental Health Services Act

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Passed by voters in 2004, MHSA was hailed as a landmark measure to drastically reduce homelessness and improve services offered to hundreds of thousands of Californians diagnosed with serious mental illnesses.

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But some lawmakers and mental health advocates have argued that it has not lived up to its original promise. Despite the additional dollars, California’s homeless crisis has only worsened.

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Part of the issue is that the funds haven’t always been used as they were intended. MSHA was initially meant to help counties expand or offer new services they didn’t have the funding for previously. But during the Great Recession, many counties were forced to use MHSA dollars to merely maintain services because of severe local budget cuts. And in 2011, state lawmakers shifted nearly $900 million of Prop 63 dollars to temporarily cover mental health programs typically paid for by the general fund.

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Since then, there’s been tension between state and local officials over the use of MHSA dollars. State officials have accused counties of stockpiling money that should be spent to address immediate needs. In February 2018, the state auditor criticized the California Department of Health Care Services for its “minimal oversight,” saying that the agency had allowed local mental health agencies to “amass hundreds of millions in unspent MHSA funds.”

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“Health Care Services’ poor oversight of the MHSA program is troubling given the importance of providing mental health services to Californians,” Former state auditor Elaine Howle wrote in a letter to the agency at that time.

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Counties, however, argue all of their dollars are allocated, although some fund programs over multiple years.

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This year, MHSA was expected to bring in $3.8 billion, which counties use to pay for community outreach, workforce training, prevention efforts and facilities.

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Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Association of California, said she’s concerned that the governor’s plan to earmark $1 billion of that for housing could cause deep cuts to current services and jeopardize critical matching dollars from the federal government.

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“California can’t choose between funding mental health services in a time of critical need and addressing homelessness,” Doty Cabrera said. “We have to do both.”

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Sacramento Mayor Darrell Steinberg, who co-authored the legislation as a state assemblyman at that time, disagrees. He supports the governor’s plan to revamp the law and redirect the funds to serve the “sickest of the sick,” those living in squalor on the streets and sidewalks of California.

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“What I’ve been saying for many years — and what the governor is now saying — is that the Act needs to be more intensively focused on the most serious consequences of untreated mental illness, namely tent encampment homelessness,” he said.

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“It’s been a lifesaver,” he added. “We just want to save more lives.”