A little more than a year after Californians approved a $6.4 billion mental health bond with a nail-bitingly close vote, we’re getting our first glimpse into how that money will be spent.
Last month, Gov. Gavin Newsom awarded nearly half of the money to projects that range from a crisis stabilization unit in rural Del Norte County to a residential addiction treatment program for mothers in Los Angeles. The initial $3.3 billion should fund more than 5,000 treatment beds and 21,800 outpatient treatment slots for people struggling with their mental health or addiction, according to his office.
That’s 74% of the beds and 82% of the outpatient treatment slots that the bond initially promised.
“It’s the issue of our time, and we’re not taking our time,” Newsom said during a news conference about the funding. “We’re addressing this crisis with that sense of urgency that you deserve.”
Mental health advocates and county leaders say they are impressed with the speed with which the state has allocated awards, and with improved geographic distribution to areas like the Central Valley when compared to past rounds of funding.
But they are also voicing concerns that California is rushing a “once-in-a-lifetime opportunity” without adequately analyzing the types of mental health services the state most needs. This analysis is especially important, they say, given that Newsom unrolled a raft of new mental health and substance use policies over the past few years.
Adding to the complexity: massive state and federal funding cuts are looming for mental health services.
While calling the bond “unbelievably significant,” Michelle Cabrera, executive director of the County Behavioral Health Directors Association, said the new state policies will require investment in specialized forms of treatment. In part for this reason, she would have liked for counties to be able to “hit pause and really reflect on what’s around the corner.”
“I think we were surprised by the drive to go so hard right now when there’s still a lot that needs to be worked out,” she said.
More even distribution of funds
Now, you may be wondering: Where is all this money going? Is any going to my community? And, how long before I can expect to see results?
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Los Angeles County received a little over $1 billion for 35 projects. The nine-county Bay Area won almost $500 million for 19 projects. Fresno County, which in recent years has been overlooked for such funds, won awards for four different projects.
The greatest number of grants went toward residential facilities treating substance use disorders in adults, followed closely by outpatient addiction programs and mental health clinics. But money also went toward sobering centers, “peer respite” programs staffed by people who have experienced their own mental health challenges, and programs specifically for children and adolescents.
That money comes from Proposition 1, which California voters approved by the slimmest of margins — 50.2% to 49.8% — in March 2024. About $4.4 billion of that $6.4 billion bond is for mental health and addiction treatment beds. The rest is for permanent housing that comes with services and support for people struggling with mental illness or addiction.
The funding is supposed to bolster Newsom’s larger mental health agenda. He signed legislation that makes it easier to place people in treatment (both voluntarily and involuntarily), and attempted to crack down on the homeless encampments where people grappling with mental illness or addiction sometimes live.
But some mental health advocates worry the state doesn’t even know what services already exist in each county, let alone having a clear picture of the types of treatment that will be necessary to meet demand created by these new policies.
“It really can’t be overstated how much of an issue it is that the state doesn’t have a system for doing this,” said Corey Hashida, a senior research associate with the Steinberg Institute, a Sacramento-based mental health advocacy organization. In their research, Hashida and his colleagues have found a shortage of short-term crisis beds around the state. Despite the fact that those types of beds tend to be less costly and less restrictive, he said, much of the focus has centered on creating inpatient psychiatric beds.
In addition to the $3.3 billion in Prop. 1 money already spoken for, applications recently opened for $800 million, which Newsom’s office plans to award to fund more treatment beds next spring. Another $2 billion will go toward new permanent housing as part of Newsom’s Homekey+ program — including $1 billion earmarked for veterans. The state is expected to decide those awards this summer.
The money for treatment beds will be funneled through an existing state program that has doled out $1.8 million to help build facilities for mental health and substance use treatment since its launch in 2021. With the influx of Prop. 1 money, the program will expand by nearly 150%.
But the existing behavioral health grant program hasn’t always met California’s needs, according to a report this year by the state Legislative Analyst’s Office.
The southern San Joaquin Valley (Fresno, Inyo, Kern, Kings and Tulare counties) has the greatest need for more adult inpatient mental health beds, according to an estimate by the RAND think tank. Yet, prior to Prop. 1, the state grants funded no beds of that type in that region, according to the LAO report. Instead, 55% of adult inpatient mental health beds funded by the grants were in the places least likely to need them: San Diego and Los Angeles counties, the northern San Joaquin Valley and the north-eastern corner of the state, from Modoc to Sacramento counties.
In the past, Fresno County was one of the areas left out of state funding awards despite needing more psychiatric treatment beds, said Susan Holt, director of the county’s Department of Behavioral Health. When the county’s beds are full, patients have to go to the surrounding counties — or sometimes as far as Northern or Southern California — to find care, she said.
Even so, the state rejected two applications in 2022 that would have helped Fresno County build new psychiatric facilities. A third application was granted, but the state Department of Health Care Services rescinded the money after the building the county intended to renovate and turn into a residential treatment center burned down.
The region’s luck appears to have changed with Prop. 1. Fresno County’s three awards in the latest funding round should help the county create 32 new in-patient beds and 2,255 outpatient treatment slots. One of the new facilities will be a locked unit for people suffering from severe substance use disorder, or both mental illness and substance use disorder. That’s being created in response to a law Newsom signed in 2023 that, starting last year, has made it easier to compel people with serious mental illnesses and substance use disorders to receive involuntary treatment.
A fourth award, to Fresno Community Hospital and Medical Center, will allow the hospital to add 107 in-patient beds.
The fact that the Central Valley fared well this time, Holt said, is “a very good indication that the state is working to evaluate where the gaps are and allocate resources accordingly.”
Another area that won out this time is the North Coast region of California, which stretches from Del Norte to Sonoma counties. It received the most money per-capita of any region — more than $24 million per 100,000 residents.
Of that money, $4 million will go to Sutter Coast Hospital to help build Del Norte County’s first psychiatric facility. Because there currently are no inpatient or outpatient treatment units in the entire county, patients needing psychiatric care sometimes have to travel as far as Sacramento, a nearly seven-hour drive.
The $4 million grant will fund a new outpatient crisis facility in Crescent City, where patients can stabilize for up to 23 hours before being discharged or transferred to a longer-term facility.
“This one we thought was going to be a long shot,” said Jodi Nerell, director of local mental health engagement for Sutter Health, who pointed out that prior state grants rarely funded these types of facilities in rural areas. She called it “a huge win.” The Crescent City project is expected to open in the first quarter of 2026.
Tight timelines for Prop. 1 projects
Ten of the Prop. 1 projects are supposed to be finished this year, including four this summer — a quick turnaround in a state where high construction costs and tricky permitting processes often lead to project delays. A CalMatters investigation of a 2018 $2 billion housing bond shows how big promises can lead to disappointment. More than five years after California voters approved No Place Like Home, just 1,797 of the 20,000 homes promised for people living with mental illness had been built.
“The timelines are tight,” Holt, from Fresno County’s Department of Behavioral Health, said of the Prop. 1 funds. “We are working feverishly to address all of the conditions, but they are mighty. And it is a very complex process to execute these projects.”
Prop. 1 dollars are intended to fund “launch ready” projects that can be finished quickly. That means applicants have to prove a long list of factors, including that they own or have a long-term lease for the project site, they have the support of the surrounding community, and that they also have their own funding to pour into the project.
Despite that, county leaders say some of the same issues that delayed No Place Like Home construction — such as NIMBYism — could still prove an issue this time. Cabrera, of the County Behavioral Health Directors Association, said it’s important to continue to track the implementation and sustainability of these projects over time.
“We can look at something on paper and decide that ‘yes, it’s what the community needs,’ and then when we get to the local planning and approvals process, we get stuck in that,” she said.
A person walks by a homeless encampment in downtown Los Angeles on Nov. 18, 2022. Photo by Larry Valenzuela for CalMatters/CatchLight Local
The state was prioritizing launch-ready projects even before Prop. 1. But that mindset can make it harder for small and disadvantaged applicants to apply, and can mean the state misses out on funding complex, hard-to-build facilities, according to the Legislative Analyst’s Office report.
That’s part of the reason Kern County didn’t try for Prop. 1 funding in round one, said Alison Burrowes, director of the county’s behavioral health department. The county has a lengthy process it must adhere to before it buys property or kicks off a building project, which doesn’t align with the state’s quick-turnaround attitude, Burrowes said.
“For us to have the land and the shovel-ready projects,” she said, “we just didn’t have anything in the wings.” Instead, Kern County supported the city of Bakersfield as it sought (and won) a grant for an outpatient substance use treatment facility.
Rural communities have it particularly tough, said Nerell of Sutter Health. Submitting these applications requires a huge administrative lift, and small, rural facilities don’t have staff to dedicate to that task, she said.
“It’s a challenge for small communities in rural areas to go after these types of things because it just requires a lot of all hands on deck,” Nerell said. “It was a daunting task thinking of how we could do this in a rural area.”