When voters cast their ballots to pass Proposition 1 in March, it ushered in a new era for mental health and substance use disorder services in California. The two-part measure will direct billions of dollars toward addressing the needs of the state’s most vulnerable populations, including those living in encampments and suffering from severe mental health or substance use issues. The proposition encompasses the Behavioral Health Services Act (SB 326) and the Behavioral Health Infrastructure Bond Act (BHIBA) of 2024 (AB 531).
Core Components of Proposition 1
Proposition 1 has two primary components:
- Behavioral Health Services Act (SB 326): The Behavioral Health Services Act (BHSA) modernizes the Mental Health Services Act (MHSA), authored by Steinberg Institute founder Darrell Steinberg and passed by voters in 2004. It prioritizes care for individuals with the most serious mental illnesses and ensures system accountability for delivering on outcomes. Beginning in 2026, it mandates that 30 percent of each county’s funding be dedicated to housing interventions for those with significant behavioral health needs who are homeless or at risk of homelessness, with a focus on those experiencing chronic homelessness. It provides approximately $950 million annually in statewide housing funding and allows counties some flexibility in reallocating funds to meet local needs.
- Behavioral Health Infrastructure Bond Act (BHIBA) of 2024 (AB 531): This $6.4 billion bond aims to expand California’s capacity to provide behavioral health care by developing treatment facilities, residential care settings, and supportive housing. The bond stipulates that The Department of Health Care Services (DHCS) can allocate up to $4.4 billion for constructing, acquiring, and rehabilitating facilities to provide a continuum of care, including crisis stabilization, residential treatment, and outpatient services. Additionally, approximately $2 billion will be managed by the Department of Housing and Community Development (HCD) to support housing projects aligned with behavioral health needs.
Implementation Timeline
The implementation of Proposition 1 will not happen immediately. Counties will be required to develop three-year integrated plans that comply with the stipulations in the BHSA and cover fiscal year 2026 through 2029. Their integrated plans must include all local, state and federal behavioral health funding, a budget, alignment with statewide and local goals and outcome measures, and workforce strategies.
There are several key deadlines over the next three to four years:
- 2024:
- August 2024: Grant applications open for the first round of bond funds.
- December 2024: Grant applications due for the first round of bond funds.
- 2025:
- Early 2025: DHCS will release policy and guidance for county three-year Integrated Plans.
- January: Counties begin to develop three-year (2026-2029) Integrated Plans. Each county must involve diverse stakeholders in the process.
- May: Grant awards announced for the first round of bond funds.
- May: Grant applications open for the second round of bond funds.
- September: Grant applications due for the second round of bond funds.
- 2026:
- March: Grant awards announced for the second round of bond funds.
- June 30: Counties submit their Integrated Plan to DHCS.
- July 1: Performance-based contracts with Behavioral Health Services Act (BHSA) requirements begin.
- July 1: DHCS establishes county Behavioral Health Outcomes, Accountability and Transparency Report deliverables. Counties will have to submit this report about their activities starting in 2028.
- 2027:
- June 30: First annual update (for FY 27-28) to county Integrated Plans due.
- 2028:
- Early 2028: County Behavioral Health Outcomes, Accountability and Transparency Report due. Each county and Medi-Cal behavioral health delivery system must submit this report annually.
This timeline reflects a phased approach with a focus on transparency, accountability, and stakeholder involvement during the implementation process.
Steinberg Institute’s Role
WIth Steinberg Institute founder Darrell Steinberg’s authorship of the Mental Health Services Act, the Steinberg Institute has long acted as a responsible steward of the MHSA, and plans to continue in this role with the modernized BHSA.
Throughout the phased implementation period, the Steinberg Institute will assist stakeholders around the state in their planning and execution efforts.