The Morning Report
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Statement: “The county of San Diego is holding over $100 million in unspent Mental Health Services Act funds,” state Sen. Ben Hueso said at an Oct. 12 press conference where Democrats and labor leaders called on county supervisors to spend more to combat the region’s homelessness and hepatitis A crises.
Analysis: Democrats and homeless advocates have long called on the county to invest more of its ample cash in programs to aid San Diegans struggling with homelessness and mental illness.
State Sen. Ben Hueso is one Democratic leader ratcheting up those pleas in the wake of a deadly hepatitis A outbreak that’s highlighted the region’s homelessness crisis. Hueso claimed at an October press conference that the county’s got plenty of cash to throw at the problem. He zeroed in on money the county gets from Prop. 63, a voter-approved 1 percent tax on millionaires meant to bankroll mental health services.
“They’re sitting on over $100 million with a $42 million reserve for who knows what reason,” Hueso said.
We decided to fact check Hueso’s claims given the growing calls on the county to spend more, particularly as campaigns to replace two long-sitting county supervisors ramp up.
So is the county sitting on more than $100 million, plus a $42 million reserve? Yes.
A county spokesman said the county has nearly $166 million sitting unspent in its Mental Health Services Act account. That includes a $42 million reserve meant to shield the county from year-to-year fluctuations in revenue from the tax.
This is cash the county receives to serve and house San Diegans with serious mental illnesses, provide early interventions for those with less acute mental health issues, test innovative programs and more.
County bureaucrats say they’re working to reduce their large unspent balance and expect it to fall to about $128 million – including a $42 million reserve – by the end of this fiscal year.
Last month, county supervisors approved a plan to spend nearly $570 million in Mental Health Services Act funds over the next three years. This year, the county plans to spend $197.5 million, an increase from last year.
Here’s a look at the county’s annual Mental Health Services Act spending and receipts over the last decade. This includes amounts the county’s already expended plus estimates on what it spent and received last year, and what it’s expecting to spend this year.
This chart shows the county’s upped its Prop. 63 spending the past couple years.
A significant share of that new cash has gone to the county’s Project One for All initiative, which aims to house 1,250 homeless San Diegans with serious mental illnesses by the end of next year.
The county reports it’s housed about 445 people with supportive services since it kicked off the program in February 2016.
County Supervisors Greg Cox and Ron Roberts proposed the initiative in early 2016 after years of criticism that the county wasn’t aggressively tackling the region’s homelessness problem.
Their proposal followed a 2015 Union-Tribune investigation that revealed the county had amassed $172 million in unspent mental health funds despite increasing community need. It also found the county’s ample pot of unspent mental health money wasn’t unusual in the state.
That remains true. A Voice of San Diego analysis of data from four other California counties revealed most also had substantial unspent cash in their Mental Health Services accounts as of earlier this year.
For example, Riverside had about $142 million in late June. Los Angeles County, which receives more than double what San Diego’s gotten from Prop. 63, had $968 million in the bank in March while San Diego County had an estimated $149 million.
County officials and health experts in the state say those figures reflect the volatility of Prop. 63 money, and requirements to spend on specific types of programs and to get state sign-off on some initiatives. Officials in San Diego County and elsewhere have debated how much counties should keep in their accounts to protect them from having to cut back programs in a recession.
Rusty Selix, a lobbyist for nonprofit mental-health providers and a co-author of Prop. 63, said some counties have been “considerably more conservative than they should be” about spending that cash as a result. He said he could not specifically speak to San Diego County’s spending patterns.
Maggie Merritt, who leads the Sacramento-based Steinberg Institute founded by Prop. 63 co-author and former state Sen. Pro Tem Darrell Steinberg, said the state deserves at least some of the blame for large stockpiles of unspent funds.
Merritt, whose organization lobbies on mental-health issues, said the state should be giving counties more guidance on how much they should be holding in those accounts.
“Counties can’t do something if they don’t have the guidance and clarity on how to do it,” Merritt said. “(The state Department of Health Care Services) is responsible for providing that, and they’re not.”
In the absence of guidance, concerns about counties’ slow Prop. 63 spending helped fuel state legislation to dedicate a $2 billion bond for supportive housing. The state’s set to use some of counties’ annual Prop. 63 proceeds to pay back the bond. This year’s state budget also included language that aimed to bolster the Department of Health Care Services’ oversight of unspent cash.
Unspent Prop. 63 cash is getting more scrutiny in other counties too.
Toby Ewing, who leads the state Mental Health Services Oversight and Accountability Commission, was recently invited to speak at a Sacramento Board of Supervisors meeting amid concerns about that community’s unspent mental health money.
In an interview with VOSD, Ewing would not comment on San Diego County’s spending but noted more leaders and residents are watching, particularly in communities where homelessness crises are raging.
“We’re at a turning point where it will be important that counties begin to spend these dollars or policymakers may elect to reprioritize them for the very obvious unmet needs that we’re seeing in our communities,” Ewing said.