In 2004, voters approved Prop 63 to help pay for mental health services with a special tax on people making more than a million dollars each year. Prop 63 taxes raise between $1.5 billion and $2.5 billion each year. Counties spend this money on many different mental health services, including housing. In 2016, state lawmakers passed a bill that created a new mental health housing program to provide homes for people with mental illnesses who are facing homelessness. The state would like to use money from Prop 63 to help pay for the new mental health housing program. This requires voter approval or permission from the courts.
State of CaliforniaProposition 2 — Mental Health Housing Program Legislatively Referred Statute - Majority Approval Required
State of California
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Amends Mental Health Services Act to fund No Place Like Home Program, which finances housing for individuals with mental illness. Ratifies existing law establishing the No Place Like Home Program. Fiscal Impact: Allows the state to use up to $140 million per year of county mental health funds to repay up to $2 billion in bonds. These bonds would fund housing for those with mental illness who are homeless.
What is this proposal?
Easy Voter Guide — Summary for new and busy voters
Information provided by The League of Women Voters of California Education Fund
The way it is now
What if it passes?
Prop 2 would allow the state to sell up to $2 billion in bonds to help pay for the new mental health housing program. Up to $140 million from Prop 63 funds could be used each year to pay for these bonds.
Budget effect
Prop 2 will have no effect on the state budget. The new mental health housing program will be paid for using money the state already gets from Prop 63 taxes on people making more than $1 million dollars a year. More money would be available for mental health housing. Less money would be available for county mental health services.
People FOR say
- The best way to help someone with mental illness is to get them a place to live.
- Prop 2 costs the state nothing and would provide housing for our most at-risk residents.
People AGAINST say
- Counties should make the decisions when it comes to housing for people with severe mental illnesses.
- Prop 2 will help home builders, instead of people with mental illnesses.
Pros & Cons — Unbiased explanation with arguments for and against
Information provided by League of Women Voters of California Education Fund
The Question
Should $2 billion in bonds be issued and the Mental Health Services Act be amended to fund the No Place Like Home Program?
The Situation
In 2004 California voters approved Proposition 63 (Prop 63) which was also called the Mental Health Services Act. It provided funding for county mental health services by increasing the income tax paid by people with an income over $1 million. Counties are responsible for providing mental health care for people that lack private health insurance. Some counties also provide for other housing, substance abuse treatment and other services for those suffering mental illness
The Legislature passed the No Place Like Home Act of 2016 (NPLHA). This Act authorizes $2 billion in bonds for use by counties for permanent supportive housing to house people who are eligible for treatment under Prop 63 and are homeless or at risk of chronic homelessness. The bonds were to be paid off with interest over 30 years using money from the revenue raised by Prop 63. A system for awarding the bond money to counties and for establishing programs to use it was also created by these bills.
No bonds were issued under the NPLHA because the state must ask for a court decision that the legislation within the scope of Prop. 63 in extending housing to people with substance abuse and other issues rather than for severely mentally ill patients. The court is to determine if voters must approve the bond. The court decision is pending.
The Proposal
This proposition approves the No Place Like Home Act of 2016 and approves the issuance of $2 billion in bonds to support the program. It also amends the provisions of Prop 63 to allow use of the revenue for NPLHA. No more than $140 million each year can be used for this program.
Fiscal effect
There is no direct impact on the state budget because the bonds are to be paid back up to $140 million annually from the funds generated by Prop 63. to repay up to $2 billion in bonds used to pay for the No Place Like Home programs. It is estimated that the bonds would be paid off in 30 years at 4.2% interest for approximately $120 million each year.
Supporters say
- Prop 2 alleviates the problem of homelessness complicated by mental illness.
- Supportive housing allows coordinated care of individuals who need treatment and housing stability.
- This uses funds already earmarked for mental health services.
Opponents say
- Prop 2 spends money on buildings instead of on badly needed treatment.
- Counties already use Prop 63 revenue to offer housing to severely mentally ill patients
- Restrictive zoning laws that make it difficult to build housing is not addressed.
Details — Official information
YES vote means
A YES vote on this measure means: The state could use existing county mental health funds to pay for housing for those with mental illness who are homeless.
NO vote means
A NO vote on this measure means: The state’s ability to use existing county mental health funds to pay for housing for those with mental illness who are homeless would depend on future court decisions.
Summary
Office of the Attorney General
- Ratifies existing law establishing the No Place Like Home Program, which finances permanent housing for individuals with mental illness who are homeless or at risk for chronic homelessness, as being consistent with the Mental Health Services Act approved by the electorate.
- Ratifies issuance of up to $2 billion in previously authorized bonds to finance the No Place Like Home Program.
- Amends the Mental Health Services Act to authorize transfers of up to $140 million annually from the existing Mental Health Services Fund to the No Place Like Home Program, with no increase in taxes.
SUMMARY OF LEGISLATIVE ANALYST’S ESTIMATE OF NET STATE AND LOCAL GOVERNMENT FISCAL IMPACT:
- Allows the state to use up to $140 million per year of county mental health funds to repay up to $2 billion in bonds. These bonds would fund housing for those with mental illness who are homeless.
Background
Legislative Analyst's Office
Counties Provide Mental Health Services. Counties are primarily responsible for providing mental health care for persons who lack private coverage. Counties provide psychiatric treatment, counseling, hospitalization, and other mental health services. Some counties also arrange other types of help for those with mental illness—such as housing, substance abuse treatment, and employment services.
Mental Health Services Act. In 2004, California voters approved Proposition 63, also known as the Mental Health Services Act. The act provides funding for various county mental health services by increasing the income tax paid by those with income above $1 million. This income tax increase raises $1.5 billion to $2.5 billion per year. No Place Like Home Program. In 2016, the Legislature created the
No Place Like Home Program to build and rehabilitate housing for those with mental illness who are homeless or at-risk of becoming homeless. The state plans to pay for this housing by borrowing up to $2 billion. The state would borrow this money by selling bonds, which would be repaid with interest over about 30 years using revenues from the Mental Health Services Act. This means less funding would be available for other county mental health services. No more than $140 million of Mental Health Services Act funds could be used for No Place Like Home in any year. The bond payments would be around $120 million in a typical year.
Court Approval Needed for No Place Like Home. Before these bonds can be sold, the state must ask the courts to approve the state’s plan to pay for No Place Like Home. The courts must decide two main issues:
- Whether using Mental Health Services Act dollars to pay for No Place Like Home goes along with what the voters wanted when they approved the Mental Health Services Act.
- Whether voters need to approve the No Place Like Home bonds. (The State Constitution requires voters to approve certain kinds of state borrowing.)
This court decision is pending.
Impartial analysis / Proposal
Legislative Analyst's Office
The measure allows the state to carry out No Place Like Home. In particular, the measure:
- Approves the Use of Mental Health Services Act Funds for No Place Like Home. The measure says that Mental Health Services Act funds can be used for No Place Like Home. No more than $140 million of Mental Health ServicesAct funds could be used for No Place Like Home in any year.
- Authorizes $2 Billion in Borrowing. The measure allows the state to sell up to $2 billion in bonds to pay for No Place Like Home. The bonds would be repaid over many years with Mental Health Services Act funds.
With this measure, the state would no longer need court approval on the issues discussed above to carry out No Place Like Home.
Financial effect
Legislative Analyst's Office
Fiscal Effect Depends on the Court Decision. The fiscal effect of the measure depends on whether or not the courts would have approved the state’s plan to pay for No Place Like Home. If the courts would have approved the state’s plan, the measure would have little effect. This is because the state would have gone forward with No Place Like Home in any case. If the courts would have rejected the state’s plan, the state would not have been able to move forward with No Place Like Home. This measure would allow the state to do so.
Published Arguments — Arguments for and against
Arguments FOR
YES on Prop. 2: Supportive housing and treatment for homeless people living with serious mental illness. Prop. 2 won’t raise taxes. It will help people off the streets and into comprehensive mental health services and addiction treatment. Homeless advocates, social workers, doctors and emergency responders agree: Yes on Prop. 2.
— Official Voter Information Guide
Arguments FOR
YES on Prop. 2 delivers the proven solution to help the most vulnerable people experiencing homelessness in California. Prop. 2 builds housing and keeps mental health services in reach for people—the key to alleviating homelessness complicated by mental illness.
More than 134,000 people are languishing on our streets, huddled on sidewalks, sleeping under freeways and along riverbanks. As many as a third of the people living in these unsafe conditions are living with an untreated mental illness.
Each year, hundreds of people living with a serious mental illness die in pain and isolation. These deaths are preventable.
Prop. 2 tackles this public health crisis that is straining our neighborhoods, our businesses, our firefighters and emergency services. It renews our sense of community and focuses on helping save the lives of the most vulnerable among us.
NO PLACE LIKE HOME
YES on Prop. 2 means building 20,000 permanent supportive housing units under the “No Place Like Home” Program. This allows coordinated care of mental health and substance use services, medical care, case managers, education and job training to help people get the treatment and housing stability they need.
Decades of research shows providing people with a stable place to live along with mental health services promotes healthy, stable lives. This combination is known as permanent supportive housing. Studies show supportive housing significantly reduces public health costs and reduces blight.
STRENGTHENING PARTNERSHIPS TO HELP PEOPLE IN NEED
YES on 2 will help establish and strengthen partnerships between doctors, law enforcement, mental health and homeless service providers to help ensure care is coordinated and tailored to meet the needs of each person suffering from mental health illness and homelessness, or who is at great risk of becoming homeless.
Without the foundation of a stable home connected to mental healthcare, people suffering from serious mental illness are unable to make it to doctors’ appointments and specialized counseling services, often showing up in emergency rooms as a last resort.
“Mental illness does not have to be a life sentence of despair and dysfunction. Supportive housing provides the stability people need as they recover from untreated serious mental illness. It helps them stay off the street and live with dignity.”—Darrell Steinberg, Author, Mental Health Services Act.
PROP. 2 IS NOT A TAX
Prop. 2 brings NO COST TO TAXPAYERS—we simply need voter approval to cut through red tape and focus on building supportive housing for people who are homeless and need mental health services. This state funding has long been earmarked for these specialized types of mental health and housing services.
Helping people suffering from serious mental illness and homelessness is not easy. But together, we can help prevent more deaths on our streets and provide critical intervention by building supportive housing connected to mental health treatment and services.
Join doctors, mental health experts, public safety officials, community and homeless advocates and many others in voting YES on Prop. 2.
ZIMA CREASON, President
Mental Health America of California (MHAC)
CHIEF DAVID SWING, President
California Police Chiefs Association
DR. SERGIO AGUILAR-GAXIOLA, Former Member
National Advisory Mental Health Council of the National Institute of Mental Health
— Official Voter Information Guide
Arguments AGAINST
Taking up to $5.6 BILLION away from the severely mentally ill to fund bonds to build them just housing without requiring treatment will force many more into homelessness. It is unnecessary, because last year the Legislature authorized county use of MHSA funds for housing without the need to borrow money.
— Official Voter Information Guide
Arguments AGAINST
Please vote “No” on the “No Place Like Home Act,” which should have been called the “Bureaucrat and Developer Enrichment Act,” because that is who we feel will most benefit at the expense of those suffering with the most severe mental illnesses.
NAMI Contra Costa members are mostly family members with “skin in the game,” so therefore are strong advocates for people living with serious and persistent mental illnesses who oppose this bill. Particularly given looming federal cutbacks, NPLH is counterproductive because it spends billions in treatment funds that Voter Proposition 63 dedicated to the severely mentally ill fourteen years ago. If passed, we strongly feel NPLH will cause more homelessness by forcing more mentally ill people into severe symptoms that could increase the numbers living on the streets.
Proposition 2 is:
- Costly—up to $5.6 Billion ($140 million x 40, for 40-year bonds) to raise $2 billion for housing projects. It won’t all go to housing, because housing bureaucrats have already guaranteed themselves $100 million (5% of the $2 Billion), admittedly far more than needed to run the program, and have also agreed between themselves to take the entire $140 million yearly as “administrative expenses,” whether or not they need that amount to pay off the bonds. Developer subsidies (low interest deferred loans that developers will use to build and purchase $2 Billion in valuable California housing, plus up to 50% operating subsidies) effectively cost the public even more.
- Unnecessary, because the Legislature authorized counties to pay for housing for their severely mentally ill Prop. 63 clients in 2017, in AB 727. Counties, which can accumulate Mental Health Services Act capital funds for up to ten years, can now do “pay as you go” both to build housing and to pay rent subsidies for these clients. Counties do not need to pay out billions in interest on bonds, unnecessary state administrative expenses, and developer subsidies to do so. Counties know their mentally ill clients’ treatment and other needs as well as what housing is already available. Only they can determine whether their MHSA funds are best used to pay for treatment or to build housing in their localities.
- Does nothing to address systemic legal barriers, like limited state protection against restrictive local zoning, that make it very difficult to build supportive housing for groups like the severely mentally ill. Neighborhoods often fight hard to keep them out. It is senseless to pay out billions in interest and expenses to borrow money that may sit unspent because of local opposition to supportive housing projects with severely mentally ill tenants.
The Voters dedicated Proposition 63 money to treatment, which prevents homelessness, in 2004. That is where it should go.
CHARLES MADISON, President
NAMI Contra Costa
GIGI R. CROWDER, L.E., Executive Director
NAMI Contra Costa
DOUGLAS W. DUNN, Chair Legislative Committee,
NAMI Contra Costa
— Official Voter Information Guide
Replies to Arguments FOR
Family members, in partnership with faith communities, actually live the tragedies described by the proponents. We struggle to find treatment and housing supports for loved ones who are targeted by this Proposition.
We support exploring well thought out housing options to end homelessness but Oppose Proposition 2 because it takes Billions away from our loved ones and rewards developers, bond-holders, and bureaucrats. As of 2017, a portion of Proposition 63 money, as determined by each county with community input, MUST fund supportive housing for those suffering severe mental illnesses. We OPPOSE cruel and senseless skimming up to $5.6 Billion of sorely needed treatment funds for bonds ($140 million yearly, for forty years) and giving $100 Million to state housing bureaucrats who don’t understand the challenges of those living with severe mental illness.
The federal government threatens treatment funding cutbacks. Therefore, we cannot afford to sacrifice any MHSA funds to solve a problem better addressed at the county level. Reducing MHSA funds needed for treatment would be a costly mistake and contribute to:
Neglect and missing treatment resources.
Causing more individuals with severe and persistent mental illness to lose housing and result in even more of them being incarcerated and living on the street.
Through stakeholder engagement, counties already know where to best acquire housing for access to critical services. Prop. 2 cuts off local input and predetermines the balance between treatment and housing needs.
Treatment prevents homelessness. Vote “No” on Proposition 2 to avoid a costly and inhumane mistake!
CHARLES MADISON, President
NAMI Contra Costa
GIGI R. CROWDER, L.E., Executive Director
NAMI Contra Costa
DOUGLAS W. DUNN, Chair Legislative Committee,
NAMI Contra Costa
— Official Voter Information Guide
Replies to Arguments AGAINST
Mental illness tragically affects many families. When left untreated, it can also seriously challenge California communities, in the form of chronic homelessness.
Homelessness aggravates mental illness, making treatment even more difficult for those with the greatest needs. People living on our streets, in doorways, and parks need help NOW. That’s why Prop. 2 is so important.
YES on Prop. 2 will help solve homelessness—and save money
Prop. 2 creates safe, secure housing, connected to mental health and addiction treatment.
Prop. 2 strengthens partnerships between doctors, law enforcement, and homeless service providers who face the challenge of providing effective care to people suffering from mental illness and substance abuse.
Prop. 2 brings NO COST TO TAXPAYERS. Instead, it cuts through red tape so communities can use existing funds to address the urgent problem of homelessness NOW.
Studies show Prop. 2 will help chronically homeless individuals living with a serious mental illness stay off the streets.
A 2018 RAND study found the Prop. 2 approach is beginning to succeed in Los Angeles County, after only one year:
- 3,500 homeless people off the streets
- 96% of study participants stayed in program at least one year
- Taxpayers saved more than $6.5 million in one year alone
- Participants visited the ER 70% less, saving healthcare costs and easing the burden on emergency responders
Learn more: Visit CAYesonProp2.org. Vote YES on Prop. 2: provide safe, secure supportive housing and services for the chronically homeless—proven to help people living with mental illness stay off the streets.
DR. AIMEE MOULIN, President
California Chapter of American College of Emergency Physicians
BRIAN K. RICE, President
California Professional Firefighters
JANLEE WONG, MSW, Executive Director
National Association of Social Workers— California Chapter
— Official Voter Information Guide
Read the proposed legislation
Who gave money?
Contributions
Yes on Proposition 2
Total money raised: $7,340,238
No on Proposition 2
No data currently available.
Below are the top 10 contributors that gave money to committees supporting or opposing the ballot measures.
Yes on Proposition 2
1
Chan Zuckerberg Advocacy - The Chan Zuckerberg Initiative
$300,000
2
No on Prop 10; Californians for Responsible Housing
$283,113
3
Pacific Gas and Electric (PG&E)
$270,000
4
Chevron
$250,000
4
Kaiser Permanente
$250,000
5
Salesforce.com
$225,000
6
Housing California
$184,395
7
California Apartment Association
$180,000
8
Dignity Health
$150,000
8
Edison International
$150,000
8
Essex Property Trust
$150,000
8
Roope, Caleb J.
$150,000
8
State Building & Construction Trades Council of California
$150,000
No on Proposition 2
More information about contributions
Yes on Proposition 2
By State:
California 90.85%
Idaho 2.04%
Colorado 1.36%
Illinois 1.02%
Other 4.73%
By Size:
Large contributions (99.99%)
Small contributions (0.01%)
By Type:
From organizations (93.62%)
From individuals (6.38%)
No on Proposition 2
More information
News (1)
Proposition 2: At Issue Is Housing For 20,000 Mentally Ill Homeless People in California — October 18, 2018 Capital Public Radio
Opinions & Analysis (6)
Yes on Proposition 2
No on Proposition 2
Videos (1)
Educational
— October 19, 2018 Cal Channel and the League of Women Voters of California Education Fund
Learn about what your yes or no vote means on Prop 2.
Additional Resources (1)
More Nonpartisan Resources
This video was created by the League of Women Voters as a non-partisan summary of the state initiatives.
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Who supports or opposes this measure?
Yes on Proposition 2
Organizations (171)
Elected & Appointed Officials (19)
No on Proposition 2
Organizations (2)
Elected & Appointed Officials (0)
