Proposition 1E would amend the Mental Health Services Act by transferring funds designated for mental health programs into the state's General Fund for a two-year period. The Mental Health Services Act, established in 2004 with the passage of Proposition 63, imposed a state income tax surcharge of 1% on personal income exceeding $1 million. This revenue has been used to fund mental health programs implemented by the state Department of Mental Health.
Since the passage of Proposition 63 in 2004, annual revenues from the tax surcharge have ranged from about $900 million to $1.5 billion. Major programs supported with the funding include community services, workforce training, facilities and technology improvements, prevention and early intervention, and innovation programs. Some funds are used in combination with federal matching funds for services to persons eligible under the Medi-Cal health program.
In general, these programs are implemented by the state Department of Health in conjunction with counties, which are the primary providers of mental health care in the state. The majority of these funds are not available for appropriation by the Legislature.
Proposition 1E would redirect some Proposition 63 funds to support the federally mandated Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program. EPSDT requires states to provide a range of medical services, including mental health services, to Medi-Cal recipients under age 21. State mental health expenditures under EPSDT now exceed $1 billion annually -- about half of this is provided by the federal government, with the remainder supplied by the state and a small portion by the counties.
State General Fund savings as a result of Proposition 1E is expected to be approximately $230 million a year for two years, with a corresponding reduction in Proposition 63 funding. Since some Proposition 63 funds receive federal matching funds, the redirection of funds could result in decreased federal financial support.
Public Opinon Resources
League of Women Voters
Reports and Studies
What Would Proposition 1E Mean for California? California Budget Project
Scheffler, Richard M. and Adams, Neal. Millionaires and Mental Health: Proposition 63 in California. Health Affairs, May 3, 2005.
Audio and Video
Center for Governmental Studies