Prop 1’s narrow victory brings uncertainty to Santa Cruz County homeless and mental health service providers

Tackling the issue of homelessness and mental health is no small task, and getting people to agree on the right approach is possibly even harder.

Proposition 1 on the March 5 ballot proved that sentiment correct. It took weeks to call the race, and the results were neck-and-neck the entire time. There was even a point when Prop 1 opponents appeared to concede, only to walk that concession back shortly after.

Prop 1 ended up passing by the skin of its teeth — the “yes” side received 50.19% of votes cast, while the “no” side received 49.81% of the vote. That split was also seen among homeless service providers, said Evan Morrison, executive director of The Free Guide — Santa Cruz County’s newest homeless services provider. He said that most service providers he spoke to about the proposition were not sure what to make of it. For once, voters appeared to feel the same way.

“I’ve grown accustomed to thinking that service providers are operating in a little bit of a bubble, and no one really understands our reality,” he said. “Yet, I feel like the actual vote was really a reflection of how service providers are thinking.”

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 will also change 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. 

Now, counties will be required to spend more funds on permanent supportive housing, with less agency to put that money toward other mental health services.

Proponents say the measure will restructure how the state spends billions annually on mental health crises and homelessness by focusing on those most in need. 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.

Karen Kern, deputy director of Santa Cruz County’s behavioral health division, declined to say how she voted on the proposition, as she did not want to share her voting record. However, she noted that discussions with colleagues and community members showed “a lot of really good arguments for and against it.” She said that the significant amount of money expected to be diverted to housing will take away from some services like early intervention, as well as workforce development and training for behavioral health personnel.

“That’s a big change that we have to understand the impacts of a little bit more,” she said, adding that staff is working to evaluate possible changes in the early days of Prop 1. “It’s really too soon to know exactly what the landscape will look like in a couple of years.”

Kern added that the county could benefit from more residential treatment facilities, but it’s also too early to tell how much money Santa Cruz County will see for that type of project. However, she said integrating substance use disorder treatment into mental health treatment could prove beneficial, because it might prevent a patient from needing to go to two different facilities for adequate help. 

“Prior to Prop 1, Mental Health Services Act dollars were restricted and could only be used to serve clients with a mental health condition,” she said. “Now, we can potentially use some of those funds to better integrate the treatment.”

Kern also said that the stability of having more housing for clients would make it much easier to provide care for them, but that there will be unavoidable financial challenges that come along with it — all of which lie in the uncertainty surrounding the available funds for other services. She is looking forward to more specific direction from the state, which she expects by summer 2025.

“We basically have to redistribute the same amount of money to spend less on treatment and more on housing-related services,” she said. “And it’s not clear what exactly that will mean.”

Despite the pros and cons, some couldn’t get comfortable enough with the measure to vote in favor. Morrison was one of those people, and he said that the reduced behavioral health funding at the county level was what kept him on the “no” side.

Morrison said that since The Free Guide is unlikely to open its own behavioral health facility, he doubts that the proposition will directly affect his organization. That said, he thinks that medium- to long-term facilities could make his work “somewhat easier.” 

However, that brings up another concern for Morrison, which is the speed at which those facilities can realistically be built. He said that in a recent meeting with builders, they said that the typical rule of thumb is that it takes five years to build anything in Santa Cruz.

“So we’re still looking at at least five years of a reduction in services before services can increase again,” he said. “Also, whoever decides they want to build these things will undoubtedly have to go through some sort of application process with the state, which means they’re probably not going to be built in a timely manner.”

Another point of uncertainty is about the 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. 

Santa Cruz County is not required to launch its program until December, and some Prop 1 opponents worry that there will be too many cases of people forced into permanent supportive housing against their will, or when it is not the right path for them.

Morrison says he thinks the CARE Court’s approach is going to make or break its power. Aside from possible civil liberties issues, Morrison believes that if more people who do not want the treatment are forced into facilities, they will likely not benefit from the care.

“Typically, treatment doesn’t work if the people receiving it don’t buy into it,” he said. “If the CARE Court process is really paying attention to making sure that folks are actually buying into receiving treatment or help, that’s great. If not, I would suspect their interventions will be largely ineffective.”

Although full implementation of Prop 1 is still a ways out, the entire process is shrouded in uncertainty. One thing that is certain, though, is a lot of change.

Kern said that the state and county have both spent a lot of time and energy over the past few years to adjust how to work with people struggling with mental illness and addiction, and that’s likely to continue for the better part of the next decade.

“It still seems really complicated, and there’s really no clear answer as to what’s going to go down here,” said Morrison. “We just have to wait and see — maybe when we’re all 10 years older.”

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