California to make $3.3 billion available for mental health, substance use treatment centers

California Gov. Gavin Newsom announced Tuesday the state will make $3.3 billion available by July for counties and private developers to start building more behavior health treatment centers

California Mental Health (Copyright 2024 The Associated Press. All rights reserved.)

Hammered by mounting pressure to address the growing homelessness crisis in California, Gov. Gavin Newsom announced Tuesday his administration will make $3.3 billion available ahead of schedule for counties and private developers to start building more behavioral health treatment centers as part of his efforts to fund housing and drug use programs.

It's the first pot of money from a ballot measure designed to help cities, counties, tribes and developers build or renovate treatment centers and clinics, among other things. Voters passed it by a razor-thin margin in March after Newsom threw all of his political weight behind it, touting it as linchpin of the state's efforts to reduce homelessness.

It authorizes the state to borrow nearly $6.4 billion to build 4,350 housing units and require counties to spend two-thirds of the money from a tax on millionaires on housing and programs for homeless people with serious mental illnesses or substance abuse problems. Applications for the money will open in July.

Newsom, standing in front of an ongoing construction project that would create 117 psychiatric beds near Redwood City, said Tuesday he wants local government to build as quickly as they can.

“It’s time to do your job. It’s time to get things done,” Newsom said. “You asked for these reforms, we’ve provided them. Now it’s time to deliver.” -

The Democratic governor, a top surrogate for President Joe Biden’s reelection campaign who is also widely believed to harbor presidential aspirations of his own, has made homelessness a political priority and vowed to transform the state's mental health system. Homelessness has become one of the most frustrating issues in California, where Newsom's administration spent billions of dollars to get people off the streets but no dramatic change has been seen in Los Angeles and other large cities.

California accounts for nearly a third of the homeless population in the United States; roughly 171,000 Californians are in need of housing. The state, with a current inventory of 5,500 behavioral health beds, needs some 8,000 more units to treat mental health and addiction issues.

The grant money Newsom announced could fund a wide range of programs including short-term crisis facilities, addiction programs, outpatient services, and locked treatment beds. The state will evaluate the projects based on gaps in local services.

“Voluntary care is always best, but sometimes we need a little bit more,” state Senator Susan Eggman, who authored a bill that became part of the ballot measure, said of funding potentially going to locked treatment beds. “Don’t say no. Let’s say how.”

Social providers and some county officials opposed the proposition, worrying the new funding structure of the tax on millionaires will threaten programs that are not solely focused on housing or drug treatment but keep people from becoming homeless in the first place. Disability rights advocates were also concerned that the new investments will result in more people being locked up against their will.

Administration officials previously said the state will streamline the application process as much as possible, but there won't be a set requirement on when proposed projects need to be completed. Some proposals, such as those that would renovate existing facilities, could open in a few months, officials said. Newsom said the state will approval proposals in the fall so the money could be dispersed to local governments by early next year.

The bond funding will allow counties to move faster in providing needed services, said Mark Callagy, the executive officer in San Mateo County.

“Now we can dream bigger because of this,” he said.

Newsom, who pushed for a new law that make it easier to force people with mental health and addiction issues into treatment last year, also blasted counties for not already implementing the program on Tuesday, though the state gives most counties a December deadline to launch their efforts. Eight counties implemented the initiative last year and have received 450 applications in the last six months, according to the governor's office.

“The state’s vision is realized at the local level,” Newsom said. “We can’t do that job. They need to do their job.”

The state also has plans to make bond funding for housing available by the end of this year. The funding, totaling nearly $2 billion, will help expand existing state's housing initiatives including a $3.5 billion effort to convert rundown motels into homeless housing.