When California voters narrowly passed Proposition 1 in March 2024, California and its 58 counties turned their efforts to delivering on the ballot measure’s promise of “behavioral health transformation.”
Prop 1 authorized a nearly $6.4 billion bond to build behavioral health treatment and residential facilities, as well as supportive housing for veterans and individuals with behavioral health challenges who are at risk of or experiencing homelessness. The measure restructured the 2004 Mental Health Services Act and renamed it the Behavioral Health Services Act (BHSA); expanded the law’s scope to include substance use disorders; changed how the longtime source of these funds, a 1% tax on incomes over $1 million, is allocated to state and local agencies; and added accountability and transparency requirements.
The transition to the BHSA altered the formula for how counties must spend their BHSA funds. Counties will continue to receive most of the BHSA dollars (90%, down from 95%), but they are required to devote significantly more funding to housing interventions and Full Service Partnerships for people with the most serious behavioral health needs.
This is a significant departure from previous allocation requirements, and many counties and providers are scrambling to adjust. The California Department of Health Care Services is releasing guidance on a rolling basis. In addition, counties must submit three-year integrated plans for Behavioral Health Services and Outcomes. For the first time, counties must look across all funding sources for behavioral health services — including Medi-Cal and commercial managed care plan services — with a goal of providing a comprehensive view of county needs and programs. It’s a heavy lift!
Population-Based Behavioral Services
Prop 1 gives the California Department of Public Health a new role in providing population-based behavioral health prevention services, and it provides funds for workforce interventions to the Department of Health Care Access and Information.
Counties are required to fully implement Prop 1 changes by July 1, 2026. A few months after the transition period began on January 1, 2025, the Bay Area Council, a think tank focused on economic and public policy issues, convened a CHCF-supported forum for shared learning and collaboration. A diverse group of regional stakeholders gathered to discuss early implementation progress. Participants included health care providers and leaders from health plans, county behavioral health departments, local universities, and local businesses.
While many of the Prop 1 requirements require compliance at the county level, the Bay Area Council recognized that regional information-sharing and collaboration will be needed to make implementation effective and efficient. Particularly in the urban Bay Area, people cross county lines all the time, so it’s imperative that counties, health care providers, health plans, community-based organizations, homeless service providers, and housing developers engaged in BHSA implementation are communicating and collaborating.
Cross-Sector Collaboration
Three key findings emerged from the meeting:
1. Cross-sector collaboration is essential to Prop 1’s potential success. Addressing homelessness and severe behavioral health conditions requires collaboration by state, county, and local governments. By the same token, it is critically important to bridge communication and coordination gaps across and among various public and private sectors, including behavioral health, housing, hospital, and health care systems.
It was encouraging to hear county leaders talk at the conference about how often they meet with people from various departments within their county governments. Health services staff actively meet with housing and homelessness counterparts, sometimes every two weeks, sometimes more frequently. I appreciated that counties were able to clearly demonstrate their proactive engagement and share practical tips for collaboration.
2. Coordinating Prop 1 resources within existing funding and program structures is challenging. Participants discussed the need for strategic alignment between Prop 1 resources and other funding sources and programs, including the new BH-CONNECT Medi-Cal waiver, managed care plan mental health services, CalAIM services focused on people with serious behavioral health conditions, CARE Courts, and existing housing initiatives. County administrators and service providers talked about the challenges of ensuring financial viability and maximizing impact, as well asthe urgent need to understand how Prop 1 works with various funding sources. The goal is to streamline processes and braid them together to produce the biggest bang for the buck.
3. Prop 1 creates an opportunity to address homelessness among people with serious behavioral health conditions. The Bay Area Council convening focused on Prop 1’s top priority, reducing homelessness. Elizabeth Funk, founder and CEO of DignityMoves, a nonprofit that builds interim supportive housing communities, urged attendees to give emphasis to innovative and less costly ways to provide housing to people experiencing homelessness.
Participants stressed the opportunities Prop 1 offers communities to coordinate helping unhoused people who have complex needs. Prop 1 has a dedicated funding stream outside of the state General Fund to do what we know — and what research supports — is the right way to put people experiencing homelessness on the path to housing and better health. At the same time, participants were clear-eyed about the challenges of achieving sufficient coordination in a short period, especially when agencies face competing priorities.
A Complex Journey
Our discussions at the convening gave us a clear message: To be successful, Prop 1 requires a concerted effort to understand each stakeholder’s unique role, to develop a local plan that integrates these roles effectively, to clarify collective goals, and to track performance. Prop 1 implementers are hungry for resources to help them succeed.
We at CHCF are excited about the collaborative paths forged during this meeting. The Bay Area Council will soon provide a summary of the themes and insights gained at this convening and the interviews they conducted with Prop 1 implementers and state and regional leaders.
The goal of integrating our behavioral health and homelessness systems under Prop 1 puts us on a complex journey that holds the potential to shape a more inclusive and responsive health care future for all Californians.
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