Steinberg Institute

Governor Newsom’s 2022-23 budget includes critical funding to address mental health and homelessness

Posted on Monday, January 10, 2022

California’s economic recovery continues to be strong, generating billions in extra tax revenue. How much? The Legislative Analyst’s Office expects a $31 billion surplus this year. This opens the door to many opportunities to make a significant impact on California’s mental health system.

It’s estimated that nearly one in six Californians lives with a mental illness, but only one-third receive treatment.

Since taking office, Governor Gavin Newsom has made unprecedented efforts to transform California’s system of mental health care for youth and expand mental health infrastructure, crisis services, and housing. Today the Governor outlined his priorities for this year by sharing his proposed annual budget for the 2022-23 fiscal year that begins July 1.

“I am thrilled to see Governor Newsom continue to make major investments in mental health and homelessness,” said Steinberg Institute founder Sacramento Mayor Darrell Steinberg. “He understands we can only solve these challenges through bold ideas: investing in new approaches to crisis response, expanding housing and addressing our behavioral health workforce shortage.”

The Steinberg Institute team is digging into the details, but here are our initial takeaways on key areas impacting our mental health system and homelessness challenge.

Mental Health Crisis Response: This summer a new 988 crisis line will launch nationwide. If fully funded, it has the potential to transform mental health crisis response in California. Along with our partners, Assemblymember Rebecca Bauer-Kahan, The Kennedy Forum, Los Angeles County Mental Health, the Miles Hall Foundation, NAMI California, and Contra Costa County, the Steinberg Institute has been hard at work to ensure this new line is launched with sustained funding and a plan to connect callers to critical services in every county. Today’s budget makes critical investments into the successful launch of 988 and development of a comprehensive and compassionate crisis continuum of care.

Newsom proposes $7.5 million for one time startup costs and $6 million in ongoing funding for the 988 line, both for the Office of Emergency Services. He also proposes $1.4 billion for mobile crisis teams to serve people with Medi-Cal health coverage. This will allow the state to leverage an 85% match from the federal government designed to support states in the implementation of 988. While this is a strong initial proposal to launch the new line and begin rolling out mobile crisis teams statewide, policymakers must build on this proposal to fully fund the 988 system moving forward by passing a small monthly fee on phone lines to mirror the funding for 911. By building on the Governor’s vision for 988 implementation, California can ensure everyone has someone to call, someone to come, and somewhere to go.

Addressing the behavioral health workforce shortage: California is facing a devastating behavioral health workforce shortage. It was a serious issue before the Coronavirus pandemic, and now it is a crisis. People are leaving the behavioral health field at record rates. Left unaddressed, more Californians will suffer as a result of untreated or undertreated mental illness. Last year we formed a Behavioral Health Workforce Strategy Group to identify legislative solutions that will address this crisis. It’s a key legislative priority for us in 2022.

Governor Newsom’s budget proposes a historic investment of $1.7 billion to bolster the healthcare workforce. With investments across the continuum, including $350 million for community health workers, $210 million for social workers, and $120 million for psychiatrists, psychologists, and psychiatric nurses it is clear that the Governor shares our vision for tackling this crisis head on and from all angles. We look forward to continuing our work with the administration to ensure that our behavioral health workforce is prepared to serve every Californian in need.

Homelessness and Mental Health: Tent encampments continue to grow under freeways, unsheltered individuals are dying during severe weather, and public safety agencies are overwhelmed with calls for service. An estimated 55,000+ of our neighbors experiencing homelessness live with an untreated serious mental illness. The trauma and stress of living outside exacerbate these conditions and create significant barriers to effective treatment. California’s homelessness crisis is directly linked to our society’s failure to offer these individuals adequate treatment and housing options.

Governor Newsom’s budget recognizes their intertwining needs by proposing to spend $1.5 billion to install and operate tiny home communities as temporary housing and offer behavioral health care treatment to the residents (as well to people living in other temporary housing situations).  Funds would be administered through the Behavioral Health Continuum Infrastructure Program created in last year’s budget.  An additional $500 million is proposed to offer short and long term housing to people living in encampments.

Perhaps even more exciting is the budget’s promise to “develop a strategy that addresses the stabilization and treatment of this extremely vulnerable population of Californians” through community-based care that includes “safe and supportive housing.”  We’ll be watching closely in the coming months to learn the details.

The budget also includes several other initiatives that impact mental health care and homelessness.  Newsom proposes making California the first state to offer universal health care, promises conservatorship reform, and promotes local government accountability for developing action plans that reduce the number of Californians experiencing homelessness.

In his press conference, Governor Newsom also singled out Mayor Steinberg for his dedication to improving California’s mental health care system. He noted that the 2004 Mental Health Services Act has generated billions of dollars to address shortcomings in our system.

“California is in the midst of a pandemic that has impacted every aspect of our daily lives and strained our mental health system. At the same time, our state has unprecedented financial resources available to address challenges that have gone unattended for too long,” said Steinberg Institute Executive Director Maggie Merritt. “Thank you Governor Newsom for fighting for California’s most vulnerable.”