California Prop 1

Implementation and timelines  

Implementation of CA Prop 1 will occur in stages. Changes to MHSA funding will take effect first. Construction of new facilities funded by bonds will follow. This process may face challenges and delays.  

Prop. 1 funding is rolling out quickly, with important considerations for cities and counties:  

Under CA Prop 1, counties face new planning requirements. They must submit three-year comprehensive behavioral health services plans. These plans will include fiscal transparency and enhanced data reporting requirements. The state will release guidance for these plans in early 2025, with implementation set for July 2026.  

The Department of Health Care Services will make applications available in July. Both nonprofit and for-profit hospitals will be eligible to apply.  

These grants apply to all types of facilities that serve people with behavioral health needs. Outpatient clinics and partial hospitalization programs for inpatient care and crisis stabilization will be eligible. There has yet to be an exact deadline. 

All applicants for funding must secure support from the county behavioral health director of the project’s location. This requirement ensures local coordination and alignment with existing services.  

Proposals should base their strategies on local behavioral health needs data. They must engage with the community and foster regional collaboration. This approach focuses on tailoring solutions to each community’s specific needs. It also encourages the development of comprehensive regional strategies.  

Analysis of fiscal impact  

The fiscal impact of CA Prop 1 is significant and multifaceted. It shifts about $140 million annually from counties to the state, altering the balance of mental health funding. Bond repayments will cost an estimated $310 million annually for 30 years, a substantial long-term commitment for the state budget. The following are some key points of its potential fiscal impact: 

• Potential strain on county budgets:
  • May affect existing mental health programs. 
  • Counties might need to find alternative funding or reprioritize services. 
• Increased state responsibilities that may require additional administrative resources and expertise:
  • New grant program oversight. 
  • Large-scale construction project coordination. 
  • Effective bond fund management. 
• Long-term budget considerations:
  • Decades-long financial commitment. 
  • Potential sustainability concerns given California’s cyclical budget challenges. 
• Possible economic benefits:
  • Potential long-term savings in emergency services, healthcare and law enforcement. 
  • Job creation in the construction and healthcare sectors. 
  • Potential boost to workforce productivity through improved mental health care.

Future outlook and potential outcomes  

In the short term, we can expect increased construction of treatment facilities and housing units. This activity will be visible in communities across California, potentially changing the physical landscape of some areas.  

Long-term projections suggest a potential decrease in homelessness and improved access to mental health care. The success of these outcomes will depend on effective implementation and coordination between state and local entities.  

How BPM can help with CA Prop 1    

CA Prop 1 significantly changes California’s mental health and homelessness approach. Nonprofits must adapt to new priorities and funding structures. BPM can help organizations face these changes with our knowledge of financial management and grant applications. We can assist by:  

• Understanding the new funding landscape, such as changes to MHSA allocations and new bond-funded grant opportunities. 
• Aligning your goals with new funding priorities. 
• Preparing competitive grant applications for bond-funded projects. 
• Helping ensure compliance with new regulations and reporting requirements. 
• Optimizing financial management under the new system.

Additional BPM services to help you adapt to the changes brought by CA Prop 1 include:     

Outsourced Accounting Services 

We can manage your financial operations to help improve accuracy and meet compliance with new reporting requirements. This allows you to focus on your core mission. 

Data Analytics Services 

Our team can help you leverage data to make informed decisions. We’ll analyze your financial and operational data to identify trends and measure program effectiveness. We can help you provide evidence to support your grant applications. 

Technology Applications Services 

We can assist in implementing and optimizing technology solutions to streamline your operations. This includes systems for tracking grant expenditures, managing client data and generating required reports for Prop 1 funding.  

We offer tailored solutions for each nonprofit’s unique needs. We recognize that the impact of CA Prop 1 will vary depending on your organization’s size, focus and location. Our services can help organizations adapt and thrive under the new system. We’ll position you to take advantage of new opportunities while mitigating potential risks.

RELATED INDUSTRIES