Governor Newsom’s 2023-24 budget prioritizes critical funding to address mental health and substance use

Since taking office, Governor Gavin Newsom has made unprecedented efforts to transform California’s systems of mental health and substance use care for all Californians. Despite a projected $21 billion budget deficit, we are thrilled to see the Governor prioritize these issues in the 2023-24 fiscal year. This year, the Governor’s budget reflects a commitment to preserving and expanding upon critical funding to address mental health and substance use during a challenging economic climate.

Here are the Steinberg Institute’s initial takeaways on key areas impacting our mental health and substance use systems.

Strengthening the continuum of care for individuals living with serious mental illness

The state has committed to pursuing new federal funding to expand mental health services provided to individuals living with serious mental illness. This innovative and transformational initiative, known as the California Behavioral Health Community-Based Demonstration project, would save countless lives by connecting Californians with the most serious needs with new mental health services and housing support (including up to six months of rental payments). Governor Newsom’s budget includes $6.1 billion for this demonstration project over the coming years.

Mental health crisis response

The new 988 mental health crisis line was launched nationwide last year, and California passed Steinberg Institute co-sponsored the legislation AB 988 (Bauer-Kahan), ensuring that every Californian in crisis has someone to call, someone to come, and somewhere to go. Governor Newsom’s budget includes $5.5 million to convene a state 988 policy advisory group established in AB 988 to help develop a five-year implementation plan. Newsom’s budget also includes a combined $19.2 million, with $14.5 million of this amount ongoing, to oversee county and health plan 988 responsibilities as well as support 988 call center crisis services. With sufficient ongoing funding and a comprehensive implementation plan, the 988 crisis line has the potential to transform mental health crisis response in California. We look forward to continuing to work with the administration to ensure that this potential is realized.

Addressing the behavioral health workforce shortage crisis

California is facing a devastating behavioral health workforce shortage. People are leaving the behavioral health field at record rates. Left unaddressed, more Californians will suffer due to untreated or undertreated mental illness. Fortunately, last year’s budget included a $1.5 billion healthcare workforce package with significant funding to bolster the behavioral health workforce. We are pleased to see that this funding remains in Governor Newsom’s 2023-24 budget given the state’s weakening revenues. However, Newsom proposes to defer $68 million in 2022-23 and $329.4 million in 2023-24 of this healthcare workforce package (including funding for community health workers) to later years. Given the dire nature of the behavioral health workforce shortage, funding to address this crisis must be distributed as immediately as possible.

The Steinberg Insitute will continue to advocate for these and other important priorities as the legislature debates the budget in the coming weeks. The final budget must be approved by June 15.

Tara Gamboa-Eastman
Senior Advocate

Tara joined the Steinberg Institute in 2020. Before coming to the Steinberg Institute, Tara worked on issues related to economic justice, housing, homelessness, and human services as a legislative staffer in the Assembly.

Corey Hashida
Senior Advocate

Corey joined the Steinberg Institute in 2022. Previously, Corey spent three years working for the nonpartisan California Legislative Analyst’s Office. He advised the state legislature on fiscal and policy issues related to a variety of healthcare topics, including mental health.

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