$13 Billion in California Mental Health Funding Wasted?


“State and county officials cannot show how billions of dollars collected through a voter-approved tax on millionaires are being spent or whether the related programs have helped people with mental illness as voters intended,” reported CBS Los Angeles, in the wake of an investigation by an independent state oversight commission.

“The Little Hoover Commission report is the latest review to find that the state has little evidence to show that $13 billion in Proposition 63 funds have been effectively spent,” said CBS.

According to the Proposition 63 website, the Mental Health Services Act was a successful proposition put before California voters in 2004 to tax people who earned over $1 million, “with the intention of expanding services while improving the quality of life for Californians living with or at risk of serious mental illness.”

The recent Commission investigation found that its not clear what most of the money has been put towards, or if there have been positive outcomes, as result of “weak oversight,” “poor transparency” and lack of fiscal accountability throughout the program. “In a report to Governor Brown and the Legislature, the Commission cited anecdotal stories of significant successes and improvements in California’s mental health system, but found the state still cannot definitively quantify who has been helped by Proposition 63 spending and how,” stated a Commission press release.

State Fails To Track Billions In Mental Health Funds (CBS Los Angeles, January 27, 2015)

Promises Still to Keep: A Decade of the Mental Health Services Act (Little Hoover Commission, January 2015)

Proposition 63 website


  1. This just shows what “more money for mental health” means. Without any imagination or new programs, of course this was going to happen.

    “Less money for mental health” would have been a much better demand.

    It is rather ironic that client groups supported the earmarked new tax. They were promised innovative, frequently client-directed programs, but got little or nothing.

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  2. I’d be interested to know where the money really went for a couple reasons.

    When the Master Settlement came along between the tobacco companies and the states in the late 90s, the idea was that a certain percentage of tobacco revenue had to be paid to each state each year. This agreement was reached with a clear and stated purpose: to provide funding for tobacco education and anti-smoking campaigns, particularly for young people, who have been the historical targets of Big Tobacco’s marketing, with the result that many of them were hooked at a young age, which is to say when they didn’t know better and couldn’t make truly informed decisions about tobacco’s harms and so became lifelong consumers of the product (a general strategy on the part of people who sell mind-altering chemicals that we might find familiar).

    But that hasn’t happened. For instance, in my state of New Hampshire, Big Tobacco has been ponying up about $50 million a year. Where is that money going? Not to tobacco education or anti-smoking campaigns. No, it’s actually going to balance the budget. Instead of addressing the harms it was meant to address, and prevent them, it’s now being treated as just another revenue source. In fact, it has in a way made the state complicit with Big Tobacco. The state now has an interest in Big Tobacco getting as much money as possible, in order to get more money every year as its share. Probably the last thing we can expect is for this windfall to ever be used for what it was meant for. But that’s getting a little off topic.

    I would be very interested to know if California is using the new revenue to provide new or expanded programs and services in addition to what was already there, or if the money is only being used to pay for services that already existed, allowing the state to shift money that used to go to mental health services to other areas. If how the states are using the tobacco settlement money is any indication, the people of California need to demand accountability and transparency in how the money is being spent.

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  3. I worked in a program that was tasked with “proving” its effectiveness in using the Prop 63 funds. Unfortunately, that is being defined in terms that are virtually impossible to track and quantify, because of a combination of HIPAA and a lack of imagination among the mental health professionals who grant the funds. My job was directly in this role. The measures of effectiveness were not defined in human terms primarily because those of us who were running the program (peers) were excluded from the evaluation design. All suggestions I made to include qualitative measures were whisked off. I worked for a peer-run organization at the time.

    I’m concerned about this article being off in that I experienced something different than it implies. While the money comes through the traditional mental health system, some agencies (like ours) are doing some wonderful work with it. Unfortunately, evaluation is based on an illness rather than a wellness model.

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    • Oh, I don’t think it was due to a lack of imagination. It’s more an unwillingness to yield control. They have rigged all the outcome measure around “symptoms” so that the drug paradigm will be able to prove “success” (though even there, they often fail). If they moved to qualitative quality of life measures, the current programs would almost all be shut down. They know this very well, and so they stick with what they can control, namely, symptom management. It is not accidental – it is very much by design.

      —- Steve

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  4. I’m glad this is being considered. I worked at many agencies in N Cal which received these monies, and I challenged them directly on how these monies were being applied, because it was easy to see that the distribution of it was askew, to say the least. From what I understood form what others had told me, there was no oversight and regulation, so it ran amuck. I hope they clean this up but good.

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