On July 1, 2016, Governor Brown signed into law the “No Place Like Home” (NPLH) program to authorize roughly $2 billion in bond funding to counties for construction or reconstruction of permanent supportive housing for individuals who are living with mental illness and chronically homeless. The programmatic elements and structural components of NPLH overwhelmingly gained passage in both houses of the Legislature; however, the bond financing provisions of the measure were deferred until after the summer recess to provide bond counsel additional time to finalize the language.
To implement the bond financing mechanism, the Legislature recently amended two budget vehicles - Assembly Bill 1628 and Senate Bill 858.
NPLH will be funded through a portion of Mental Health Services Act (MHSA) funding, also referred to as Proposition 63 funding, which is funded through a 1 percent tax on personal incomes above $1 million. Importantly, Assembly Bill 1628 and Senate Bill 858 both contain a key provision that places a $140 million cap on the total annual amount of funding that can be diverted from this funding source. While we do not have the exact county-by-county impact information available at this time, a report will be issued to provide a 6-month advanced notice of how much funding will be diverted off-the-top of Proposition 63 (up to a maximum of $140 million).
RCRC and our county partners expressed concern to Legislative leadership and the Department of Finance regarding the uncertainty of annual county MHSA funding allocations and requested that information be provided to counties in advance to mitigate the potential impacts. It is important to note that current MHSA county allocations are projected to increase year-by-year, which could minimize any potential funding reductions. However, Proposition 63 funding is relatively volatile and can shift significantly based on economic conditions, so it’s difficult to predict how future county MHSA allocations will be impacted.