Prop 1 explainer: Santa Cruz County faces ‘tough call’ on statewide mental health measure

Homelessness is one of California’s major issues. As the cost of living skyrockets and housing shortages threaten many communities in the state, including Santa Cruz County, local and state governments are quickly trying to figure out ways to tackle the challenge — particularly for the most vulnerable residents.

Proposition 1 on the March 5 ballot is the latest attempt to chip away at that big problem. The measure authorizes the state to issue $6.38 billion in bonds to build treatment facilities for those with mental health and substance use challenges, including about $2 billion on housing for the homeless.

It also changes how the state allocates funding under the 2004 Mental Health Services Act, which implemented a “millionaires tax,” a 1% tax on personal incomes above $1 million, to fund county mental health systems. If Prop 1 passes, counties would be required to spend more of the funds on building permanent supportive housing, with less discretion to put the money toward other mental health services.

Essentially, Prop 1 is asking voters two questions: Should the state borrow money to build treatment facilities and supportive housing? And should it change how existing mental health money is spent, largely by using more of it to build housing at the expense of other behavioral health programs?

Proponents say the measure will restructure how the state spends billions annually on mental health crises and homelessness by focusing on those most vulnerable. Opponents worry that the measure will cut too much of the funding that counties have available for preventative services and lead to more involuntary behavioral health treatment facilities, including more locked psychiatric facilities.

Both the Santa Cruz County government and homelessness nonprofit Housing Matters opted not to take an official stance on Prop 1. Housing Matters CEO Phil Kramer told Lookout that the organization’s policy committee took stances only against Measure M, the ballot initiative about height and density in Santa Cruz, and in favor of Measures K and L, the proposed county and city sales tax increases, respectively. Robert Ratner, director of the county’s Housing for Health Division, did not give a reason why the county didn’t take a stance on Prop 1.

Earlier this month, the Santa Cruz County Mental Health Advisory Board, which provides guidance to lawmakers on mental health issues, urged the county board of supervisors to oppose Prop 1. Advisory board members warned that the ballot measure would redirect about a third of funding authorized under California’s 2004 millionaires tax from existing mental health care services toward housing and would allow the state too much control over local behavioral health programs.

“The results will be devastating at the local level,” board members wrote. 

Existing mental health programs funded by the state tax are “a lifeline for underserved communities and people without insurance,” not all of whom are unhoused, they added. “The passage of Prop 1 would constitute the biggest change in the structure of mental health funding in California in 20-plus years.” 

However, others said the proposition was tricky to navigate. Evan Morrison, executive director of Santa Cruz Free Guide — the county’s newest homeless services provider, which runs the 24-hour safe-parking program at the National Guard armory at DeLaveaga Park — said he was still unsure whether he will support the measure in next week’s vote.

He said the state’s analysis shows that there is a 10,000-bed shortage in mental health and substance-use services, and estimates that Prop 1 will cover 6,500 of those beds. He called that a “huge win,” but he said he’s certain it will do little to address homelessness. It’s “a myth” that mental health and substance-use issues are the cause of homelessness, said Morrison, who argues that homelessness is driven by high housing prices and too few units.

“What we need to end homelessness is funding on the scale of $8.1 billion a year, not a one-time infusion of $2 billion,” he said. Morrison added that he’s concerned voters will think the money will be a significant help in tackling homelessness, when it won’t: “It’s going to make a big difference in the realm of mental health and substance use, just not in homelessness.”

Morrison said he feels the proposition has been “mislabeled,” and pointed out that many of the people using substance-use and mental health services are not unhoused. He said he is also concerned that the measure places stricter parameters on how existing state funds could be used.

“In my view, every county is underfunded in providing services already and if this passes, every county is going to be short on mental health services,” he said. “I think it’s probably that we’re going to see some increase in facility capacity long term, but in the short term, we’re going to have a funding deficit.”

Supporters of Prop 1 say that as many as 4,350 new housing could be built with the funds statewide. But Morrison said that Santa Cruz County alone probably needs 5,000 to 10,000 low-income housing units to make a visible difference in homelessness. He also said that, if he were to design a plan, it would include treatments for unhoused people targeting post-traumatic stress disorder, attention-deficit/hyperactivity disorder and executive dysfunction disorder.

“I think if we were addressing those issues among the homeless population, folks would probably be much more adept at ending their own homelessness,” he said.

Others say the need for housing is so high that the proposition is worth potentially cutting county preventative services. Housing Santa Cruz County Governing Board Chair and former Santa Cruz mayor Don Lane said he voted “yes” on the proposition — but “with some hesitation.”

“If the proposition passes, we’re going to get more shelter and facilities that really put people indoors, but we’ll lose some of the positive, community-based actions that are also really valuable,” he said, adding that things like drop-in centers and outreach programs could suffer cuts. “It’s a tough call.”

Lane said he agrees that people often struggle with substance-use disorders and mental health because they have lost their housing and are experiencing the trauma of living unsheltered. But, he said, getting them back into housing is the best way to deal with those issues. That was ultimately the deciding factor for Lane.

“I think the housing focus is super important no matter which side of this you’re on,” he said. “If people who are having a lot of difficulties around substance use or mental health get some kind of intervention, but are still living outdoors, they’re not going to see long-term improvement. Once they’re housed, all those other interventions work much better.”

Lane said opponents’ concerns that more people could potentially be involuntarily placed in treatment facilities are certainly valid, but “it could be overstated.” He believes it is going to come down to each county’s Community Assistance, Recovery and Empowerment (CARE) Court — a new court system in each county with the ability to order people experiencing certain psychotic disorders into state-sponsored treatment — and how the court approaches its duty of delivering services.

Although Santa Cruz County will not be required to implement its CARE Court program until December, opponents worry that, should Prop 1 pass, there will be too many cases of people forced into permanent supportive housing or another facility when it is not the right option. 

“If [the CARE Court] is heavy-handed, it’s not going to be good. If it’s done with a light, human touch, it can be really meaningful and helpful,” Lane said.

And, no matter which way Prop 1 goes, it’s not a cure-all, he added. But for Lane, it’s a start.

“All of these things are not enough, but every time we can bring someone indoors, everyone is a lot better off,” he said.

Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.