What’s Up in California: New Funding Sources for Mental Health Services

1. What’s Up in California: New Funding Sources for Mental Health Services National Alliance to End Homelessness Annual Conference July 18, 2006 Presentation by: Alecia HopperJonathan Hunter Public Policy Coordinator California Program Director Mental Health Association Corporation for Supportive of San Francisco Housing Moderated by: Karen Gruneisen, Managing Attorney, HomeBase Mental Health Association of San Francisco

2. Focus on: • Mental Health Services Act (Proposition 63) • Governor’s Initiative to End Chronic Homelessness Mental Health Association of San Francisco

3. Part I: Mental Health Services Act Mental Health Association of San Francisco

4. History In California • 1968: state mental hospitals emptied • California led the nation in deinstitutionalizing mental illness • Promise of community care • Promise never fulfilled • Currently, tens of thousands are without care • more than 50,000 individuals with severe mental illness live on the streets of California Mental Health Association of San Francisco

5. Background • Darrell Steinberg, Assemblyman, Sacramento • AB 34/AB2034 (1999) • Created “integrated services model” • Importance of what was measured - cost savings Mental Health Association of San Francisco

6. Why an Initiative? • In spite of clearly documented offsetting savings, the Legislature has been unwilling to expand programs • Strong public support • 36 year unfulfilled promise of community programs Mental Health Association of San Francisco

7. This initiative is funded by... • 1% tax on “taxable” personal incomes over $1 million • Taxpayers earning $1.5 million would pay a tax of $5000 • Deductible from federal income taxes • Is this tax fair? • This tax is a small portion of what these taxpayers save • California Property Taxes and recent federal tax cuts Mental Health Association of San Francisco

8. How does Prop. 63 affect the State Budget? • Existing Entitlements are Protected • State can’t reduce funding or shift costs to counties • Funds must be used to expand not supplant services • Estimated $500 million savings for State General Fund in criminal justice system, emergency rooms and welfare • LA County jail is the largest mental health care provider in California Mental Health Association of San Francisco

9. What does Prop. 63 do? • The Mental Health Services Act became law effective January 1, 2005 • Provides almost 1 Billion per year to counties • $1.1 and 1.2 billion for 05/06 • Estimated between $1.2 and 1.3 billion for 06/07 • Uses allocation formula • Offers mental health care to children, transitional age youth, adults, seniors • Covers uninsured, and those whose insurance coverage has run out Mental Health Association of San Francisco

10. MHSA Fund Allocation – FY 05/06-FY 07/08 • Education/Training = 10% • Capital Facilities/Technology = 10% • State Imp/Adm. = 5% • Local Plan = 0% • Prevention/Early Intervention = 20% • CSS = 55% • (5% of Prev & CSS for “innovative programs”) Mental Health Association of San Francisco

11. Five Funding Areas • 1) Prevention and Early Intervention • 20% of funding • This component will support the design of programs to prevent mental illnesses from becoming severe and disabling, with an emphasis on improving timely access to services for underserved populations. • Emphasis on reducing: • Suicide • Incarcerations • School failures or dropouts • Prolonged suffering • Homelessness • Removal of children from their homes Mental Health Association of San Francisco

12. Five Funding Areas • 2) Community Services and Support (CSS) • 50% of funding • The CSS are the programs, services, and strategies that are being identified by each county through its stakeholder process to serve unserved and underserved populations, with an emphasis on eliminating racial disparity. • At least 51% of $ must be spent on wrap-around “whatever it takes services” • based on AB34 program (see http://www.ab34.org/) • The remaining $ are spent as determined by the County based on an intensive public stakeholder process Mental Health Association of San Francisco

13. Five Funding Areas • 3) Education and Training • 10% of Funding • This component will target workforce development programs to remedy the shortage of qualified individuals to provide services to address severe mental illnesses. • State will create plan • Educational stipends, loan forgiveness and other strategies to increase the mental health workforce Mental Health Association of San Francisco

14. Five Funding Areas • 4) Capital and Information Technology • 10% of funding • This component will address the capital infrastructure needed to support implementation of the Community Services and Supports programs. • It includes funding to improve or replace existing IT systems and for capital projects to meet program infrastructure needs. Mental Health Association of San Francisco

15. Five Funding Areas • 5) Innovative Programs • 5% of the funding • The goal of this component is to develop and implement promising and proven practices designed to increase access to services by underserved groups, increase the quality of services and improve outcomes, and to promote interagency collaboration. Mental Health Association of San Francisco

16. MHSA Fund Allocation – Years 5+ • State Imp/Adm. = 5% • Prevention and Early Intervention* = 20% • CSS = 75% - (5% of Prev. & CSS for “innovative programs”) • Local Planning up to 5% of local funds • NOTE: Capital Facilities is no longer a “set aside” but counties can choose to devote CSS funds to meet capital needs on an ongoing basis! • Maximum of 20% can be dedicated to Capital / IT, Education and Training (ie Human Resources) and Prudent Reserve *Amount for Prevention and Early Intervention can be increased in specific circumstances. Mental Health Association of San Francisco

17. Stakeholder Process • Stakeholder: a person or an organization that feels they have an active interest in the outcome of an issue or topic. • clients, family members, county mental health departments, mental health providers, schools, social services, law enforcement and others. • Intensive on going local and state-wide stakeholder process • In San Francisco over 70 community meetings held to create CSS plan • State DMH holds on-going meetings, conference calls, email updates, etc. Mental Health Association of San Francisco

18. Oversight and Accountability Commission • Responsible for Oversight of the MHSA • 16 members-- All appointed by governor • Attorney General • Superintendent of Public Instruction • Chairperson of the Senate Health and Human Services Committee • Chairperson of the Assembly Health Committee • Two persons with a severe mental illness • a family member of an adult or senior with a severe mental illness • a family member of a child who has or has had a severe mental illness • a physician specializing in alcohol and drug treatment • a mental health professional • a county Sheriff • a Superintendent of a school district • a representative of • labor organization • an employer with less than 500 employees • an employer with more than 500 employees • a health care services plan or insurer Mental Health Association of San Francisco

19. Oversight and Accountability Commission • Law requires counties to develop three year plans • Plan must be developed with local stakeholders and receive state approval • Reviewed and renewed on a yearly basis • Works with State DMH to develop policies that will transform the mental health system in California Mental Health Association of San Francisco

20. Purpose is to transform the mental health system, not business as usual Shifts the system from fail first to help first by focusing funds specifically on prevention and early intervention Funds are continuously appropriated Funds are not tied to “medical necessity” - local creativity results Cultural competence in service delivery is fostered Reasons for Optimism Mental Health Association of San Francisco

21. Communities articulate the link between “recovery” and permanent housing and fund housing Unprecedented consumer and family involvement brings much expertise New roles emerging for seasoned stakeholders Helps to reduce mental health stigma Increases the political voice of the mental health community More Reasons for Optimism Mental Health Association of San Francisco

22. Part II: Governor’s Initiative to End Chronic Homelessness (“GHI”) Mental Health Association of San Francisco

23. GHI, Phase I: New Capital Dollars!! • A New Funding Program was established by the Governor in 2005 to target housing funds to projects serving people who are severely mentally ill and chronically homeless • Note: the State is NOT using the HUD definition of chronically homeless but individual projects may use the more restrictive HUD definition if they are leveraging HUD funds • This program funding is comprised of: • $40 million in MHP (Multifamily Housing Program-Prop 46) • $2 million in MHSA (from State administrative dollars) Mental Health Association of San Francisco

24. GHI, Phase I: More than Housing Fund • In addition to this housing fund, the Governor: • Created the State Interagency Council on Homelessness • Provided funds for the Council to develop a Ten Year Plan to End Chronic Homelessness; • Provided MHSA funds to provide training to counties on building collaboratives to develop supportive housing Mental Health Association of San Francisco

25. GHI, Phase I: Application Process • These housing funds are available by applying to the State Department of Housing and Community Development • The application form and process is similar to the State’s existing Multifamily Housing Program • The application process opened on January 16, 2006 and the deadline for submitting an application was July 14, 2006 • A handful of applications received; application process revisited Mental Health Association of San Francisco

26. GHI, Phase I: What is Funded • At least 35% of the units in a project must serve the GHI target population to be eligible • The GHI program provides $30,000 per unit MORE in loan funds than MHP • GHI provides $5,000 per unit in MHSA funding in a lump sum to establish a rent reserve Mental Health Association of San Francisco

27. GHI, Phase I: Funding Requirements • MHSA funding for services is required, and must be committed, to submit an application • MHSA funding for operating subsidies is “expected,” unless there is a Federal source that will cover this cost • The GHI program requires the same sponsor experience criteria as MHP Mental Health Association of San Francisco

28. Governor’s Initiative to End Chronic Homelessness: Phase II • As part of the (2006) May Revise, the Governor has announced Phase II of the Governor’s Chronic Homeless Initiative • $75 million of MHSA funds per year will be “pooled” at the State • The goal is to leverage these pooled funds with other public and private investments to create supportive housing for people with mental illness who are chronically homeless or coming out of institutions • The pooled funds will be administered by the California Housing Finance Agency (CalHFA) • State DMH, Housing and Community Development (HCD) and CalHFA will continue to be partners in expanding supportive housing options and leveraging funding opportunities Mental Health Association of San Francisco

29. GHI, Phase II: What we Know Now • “Chronic homeless” definition currently used in GHI is not the HUD definition. The definition to be used in Phase II will be worked out in conversation with stakeholders in the state’s Ten Year Plan process (probably this summer) • CalHFA is moving legislation to establish a special needs lending program that will be separate from its current lending instruments; the goal is flexibility to construct complex deals Mental Health Association of San Francisco

30. GHI, Phase II: What we Know Now • Projects receiving capital funds must be linked to MHSA services and operating support funded by the county • State will work in partnership with counties to determine allocation goals and process and to ensure small county set aside • Technical assistance will be available to counties and project sponsors Mental Health Association of San Francisco

31. GHI, Phase II: What we Know Now • The $75 million amount means that counties will still have “room” to designate local MHSA funds for other capital and workforce development needs • State will be working in partnership with counties to further define program and process • Flow of projects is anticipated to be developer/sponsor seeks county approval and partnership then goes to state DMH and CalHFA Mental Health Association of San Francisco

32. GHI, Phase II: What we Know Now • Some Goals include: • leverage bonds, tax credits and other existing instruments • link to existing Ten Year Plans to end homelessness and other partnerships • partner with other local investments by cities, counties, redevelopment authorities, etc. • real homes for real people integrated into the fabric of the community • 13,000 units of housing over twenty years • First funds may be available in early 2007 Mental Health Association of San Francisco

33. Alecia Hopper Mental Health Association of San Francisco Phone: 415.421.2926 Email: alecia@mha-sf.org Jonathan Hunter Corporation for Supportive Housing Phone:619.232.3197 Email:Jonathan.Hunter@csh.org Questions? Mental Health Association of San Francisco