Meant to help with mental illness, money from tax on millionaires piles up
So much Mental Health Services Act revenue piled up, San Diego County collected more than $12 million in interest from the unspent cash.
Even today, as the homeless crisis deepens and suicide remains persistently high, critics say too much of the money the county spends from the fund goes to consultants, reports, public relations and pilot projects rather than direct treatment for patients most affected by mental illness.
“They’re not addressing the seriously mentally ill,” said Theresa Bish, who used to serve on the county mental health advisory board. “They have allowed the problem to be on the shoulders of our jails and prisons and hospitals.”
At the end of the 2016-17 fiscal year, the latest period for which data are available, San Diego County had $170.6 million in unspent Mental Health Services Act revenue, including $42 million held in reserve as required by the state.
The amount rose steadily over years, state records show. In 2007, the county had $23 million in unspent cash. By 2009, the bank balance swelled to $58 million and by 2011 it reached $133 million.
County officials defend their handling of revenue generated by the Mental Health Services Act, the 2004 ballot measure that imposed a special tax on California millionaires.
They said the long-banked funding had no bearing on the county response to the deadly hepatitis A outbreak, which they called a well-coordinated effort involving many government agencies and budgets.
They began spending down the reserve ahead of the public health threat, they said. More important, it will be all but gone by mid-2020, according to current estimates, they said.
“Before the outbreak even occurred we had already increased MHSA spending,” finance director Andrew Pease said. “The Hep A response is far larger than mental health stuff. The county employed a whole bunch of other services. We weren’t sitting on this money.”
Other counties also have been slow to spend down the revenue. Sacramento County reported $126 million in unspent mental health dollars in 2016 and Orange County has $242 million on deposit. Los Angeles, the state’s most populous county, reported $739 million in reserves that year.
The excess funds have not escaped the notice of other elected officials, who regularly field complaints about homelessness and a lack of adequate services for people lacking shelter. San Diego Mayor Kevin Faulconer is publicly prodding county leaders to do more.
“Just like the city is doing with homelessness, the county MUST take a different approach with mental health,” Faulconer tweeted Tuesday night, the eve of World Mental Health Day. “Without more psych beds, ‘step-down’ facilities, long-term housing and strong outreach that proactively helps the mentally ill off the streets, we can’t turn things around.”
Assemblyman Todd Gloria poked county officials Wednesday, tweeting a chart published by the state auditor in February indicating that billions of dollars in Mental Health Services Act funding remained to be spent.
“We have a lot of work to do to fight stigma and help those suffering with mental illness,” he wrote. “Demanding CA counties use the $2.5 BILLION in unspent Prop 63 funds would go a long way to doing that.”
San Diego County Supervisor Ron Roberts wasted little time responding.
“Old numbers, my friend,” he tweeted to Gloria less than two hours later. “That’s from 2015-16. We are spending $80 million more annually than 2015-16 in San Diego County. The unspent reserve is gone by 2019-20.”
Waste and redundancy
Presented to voters as Proposition 63 the same day George W. Bush was re-elected president, the Mental Health Services Act imposed a 1 percent income tax on residents earning $1 million or more.
The idea behind the so-called millionaire’s tax was to create a dedicated money stream to pay for expanded treatment and other services for seriously mentally ill people and those vulnerable to schizophrenia, bipolar disorder, depression and other sicknesses.
San Diego County has reeled in more than $1 billion for mental health programs since then, including $151 million in the year ending June 30, 2017.
But according to mental health advocates and independent auditors, both the county and state failed to properly implement the law and voters’ will. Instead, policymakers created a system that promotes waste and redundancy and allows counties to bank the funding, they say.
“The counties were informed sort of informally that the money could not go to existing programs, which was simply not true,” said Rose King, who co-wrote the Mental Health Services Act and is now a Sacramento activist and whistleblower against its misuse of funds.
“They could put the money into existing programs,” King said. “They could pay the psychiatrists more to get more psychiatrists into the system. They could hire more social workers and more clinical services people so patients don’t have to wait three or four months for treatment.”
Alfredo Aguirre, who runs the county behavioral health department, said his office has been investing mental health funds carefully to serve as many people as possible and to comply with state mandates governing the program.
“We’ve developed more resources and we have strengthened our continuum of care,” he said. “The whole idea is we want to serve people so they don’t get into a crisis.”
Aguirre said the county Board of Supervisors has made a considered effort to invest more mental health funds into the community. His budget jumped almost 20 percent this year, to $658 million.
But he also said there are strict guidelines on how the special tax revenue can be spent, and much of the funding has to be directed to education programs and pilot projects.
“We’ve been compliant from Day One,” Aguirre said.
Even though compliant with state regulations, some county mental health spending was criticized by the grand jury two years ago.
“MHSA includes vague and ambiguous language that allows very broad interpretations of how to spend MHSA funds,” the grand jury found. “The result is that San Diego County uses MHSA for a wide variety of programs only tangentially related to those with, or at risk of, serious mental illness.”
Jurors singled out efforts to reduce gang violence, improve parenting, prevent hoarding and reach out to Alzheimer’s patients.
County officials said the spending was appropriate and within state guidelines.
“The chief administrative officer disagrees wholly with this finding,” they replied.
One of the main initiatives in San Diego County is “It’s Up to Us,” a years-long multimillion-dollar promotion aimed at attacking the stigma often associated with mental illness, which according to the county affects one in five adults.
The campaign includes television commercials, printed materials, educational workshops and other methods of raising awareness of mental health issues, preventing suicide and providing easier access to services.
But while visits to the “It’s Up to Us” website continue to climb — a 17 percent spike in 2016 and another 8 percent last year — more people are committing suicide than ever before.
In 2004, the year Proposition 63 passed, 314 people in San Diego County took their own life. By 2017, the suicide rate had jumped 45 percent, to 458 people.
Critics say investments like “It’s Up to Us” should take a back seat to direct help.
Bish, the former advisory committee chair, said the county should boost the number of beds available through assisted outpatient treatment, a program under Laura’s Law that gives local officials the authority to petition court to order patients into residential care.
“If they expanded treatment and had the political and administrative will, they would seriously start making a dent, because over 40 percent of the homeless population is mentally ill,” Bish said. “They haven’t had a will historically to treat those who are most afflicted.”
County supervisors waited until 2016 to even adopt a policy allowing mental health officials to implement Laura’s Law, the 2002 statute passed after 19-year-old Laura Wilcox was murdered by a Nevada County man who refused psychiatric treatment.
San Diego County officials have twice petitioned judges for commitments under Laura’s Law, both in recent months. Three dozen other patients agreed to treatment after being threatened with involuntary commitment since 2016, they said.
“We’ve made a tremendous effort to engage this hard-to-reach population,” Aguirre said. “If they need a court order, we’re prepared to do that.”
Meantime, the number of beds available to serve patients experiencing psychiatric emergencies continues to shrink.
Tri-City Medical Center shuttered its 16-bed unit earlier this month after complaining that it was losing $5 million a year on the program. Police and sheriff’s deputies in North County now have to drive people who are a threat to themselves or others to Poway or Escondido for treatment.
Dr. Michael Plopper is the chief medical officer at Sharp Behavioral Health Services. He said patients who are ready to move from emergency treatment often have difficulty finding a place to receive continuing care.
“Our biggest needs have been for the seriously mentally ill and relatively to the continuum of care after residential treatment,” Plopper said. “We’ve had a significant reduction in the number of board-and-care beds. That means it’s much more difficult in hospitals to discharge people into new environments.”
About one in four patients released after emergency treatment return within 30 days, Plopper said — a recidivism rate that has remained steady for years and inflates costs for providers and first responders.
If policymakers can find ways to enhance outpatient services — add psychiatrists, promote access to prescriptions, increase supportive housing with wrap-around services — the 700 or so in-patient beds now available countywide will suffice, he said.
“If our continuum was fleshed out and approved, I think we have enough beds,” Plopper said. “But without that we are all seriously impacted. We are full all the time.”
It’s not entirely clear how county officials will spend down the mental health reserves.
So far, officials earmarked $28 million this year for Project One for All, which works to find clients and provide treatment, housing and other services. Since 2015, the county also has doubled its PERT effort, the psychiatric emergency response teams that can step in when police or deputies encounter seriously mentally ill people.
State law requires the Mental Health Services Act revenue be invested in five categories: community services, prevention and intervention, innovations to improve access to services, technology and job training. But local authorities get a lot of leeway in deciding which programs to support.
Several current contractors hope for an increase to existing agreements so they can offer cost-of-living or merit raises to their staff. Others would like to see programs that were scrapped previously given another chance.
“When it comes to innovation contracts, we’ve had outcomes that were tremendous but never got moved onto long-term contracts,” said Cathryn Nacario, who runs the San Diego office of the National Alliance for the Mentally Ill. “It’s just an ongoing frustration.”
Daphyne Watson of Mental Health America of San Diego County said the way funding streams are categorized can defeat the purpose of providing help to those in need.
“If they identify as a homeless person they’re going to get homeless services,” she said. “Oftentimes it focuses on getting them off the street, but there’s not enough linkage or funding to provide ancillary services.”
State lawmakers intent on reducing the number of “frequent flyers” — the seriously mentally ill and drug- or alcohol-addicted patients who churn through hospital emergency rooms at terrific public expense — this year approved a new tool to help local officials.
They approved a five-year pilot project that grants San Francisco, Los Angeles and San Diego county officials the authority to go a step further than seeking treatment for those who need help — it allows officials to seek outright conservatorship of a person’s affairs. The law calls for county supervisors to approve the arrangement before conservatorship can be sought.