Prop 1 to cut $13 million to SLO County behavioral health programs. What's on chopping block?

Yahoo

11-03-2025

Around 30 people who have dedicated their lives to working in mental health services in San Luis Obispo County — half in person and half on a Zoom screen — gathered in the basement of a county building on Jan. 29.
The meeting was tense and solemn. It was the last meeting they would have as Mental Health Services Act committee members — and the last before at least $13 million cuts would be made to the mental health programs they support.
The cuts stem from changes in state law after Prop 1 passed, a bill that according to the California Department of Health Care Services reforms mental health care funding 'to prioritize services for people with the most significant mental health needs while adding the treatment of substance use disorders, expanding housing interventions and increasing the behavioral health workforce.'
But in practice, providers said, the bill is doing the opposite.
John Crippen works as a behavioral health navigator for a Transitions-Mental Health Association program that helps people at high-risk and in need of intensive support navigate the behavioral health system. He was among the first cuts following Prop. 1's approval, he said.
'With TARP, that applies to… people that are higher risk. What's going to happen to them after they lose their entire treatment team?' Crippen said in the January meeting. 'We are an excellent return on investment, and I can't understand why some of these essentials are on the chopping block.'
In 2024, voters passed Prop 1 on a slim margin, with 50.2% of voters supporting the proposition statewide.
In San Luis Obispo County, a larger margin of voters rejected it, with 54% of voters opposing the changes to mental health and housing.
Prop 1 redefined the Mental Health Services Act, which passed in 2004.
The Mental Health Services act was revolutionary for its time, Transitions executive director Jill Bolster-White told The Tribune.
It significantly revamped the state's mental health system by imposing a 1% income tax on people making more than $1 million per year. Those funds allowed local governments the flexibility to fund programs to support people living with severe mental illness, including prevention programs and programs not billable by Medi-Cal.
It also introduced the idea of prevention services for mental health — something that had long been reserved for substance use disorder.
Through the Act, services also did not require reimbursement or processing clients' billing though Medi-Cal, according to Frank Warren, deputy director of the San Luis Obispo Behavioral Health Department.
That all changed with Prop 1.
Prop 1 renamed the legislation as the Behavioral Health Services Act and carved out a new bucket of funding to focus on housing — but the money for housing projects is taken from money for services.
Warren said like many other programs that rely on Mental Health Services Act funding across the state, the county's behavioral health team largely opposed Prop 1 when they first heard about it in March 2023.
Services funded by the Mental Health Services Act placed more of an emphasis on the prevention side of mental illness, operating under the idea that it's more cost effective to treat an issue before it becomes more significant, Warren said.
'The Mental Health Services Act, in original, didn't really care whether you had insurance or not,' Warren said. 'It was be served where you are.'
Now, Warren said, the messaging from the state is that prevention programs can be done through public health agencies. The Behavioral Health Services Act instead focuses on individuals who need the most severe help and those who are Medi-Cal eligible.
'There was a great focus on cultural competence, underserved populations, prevention, innovative ideas,' Warren said. 'The bill really stripped those out.'
Under Prop 1, 30% of funds must go to housing — an allotment that takes millions of the county's current allotment from prevention services like Crippen's outreach work and from treatment beds, Warren said.
Another 35% will go to programs for people with severe mental illness who need intensive programs, known as full-service partnerships and the remaining 35% to behavioral health support and services.
Programs also must be billable through Medi-Cal and only those insured by Medi-Cal can be served.
County Behavioral Health Services Act coordinator Christina Rajlal said the County is looking at possibilities of billing private insurance, but whether someone uninsured can receive help depends on their crisis level.
An uninsured patient will receive care if they are entering a crisis service, Warren said, but if it's not a crisis, the county will provide a screening assessment then connect the patient to the Department of Social Services to be enrolled in Medi-Cal.
Rajlal said this change in funding priorities will hobble the behavioral health department's ability to provide necessary wraparound services to people placed into housing.
'One of the things that is written into the housing bucket is none of the funding is allowed to be used for treatment services, and we know that one of the challenging parts about serving those that are unhoused is the retention of housing,' Rajlal said. 'I can put somebody in four walls — how do I retain them safely in those four walls, and get them stabilized, and get them in treatment, and get them all of the necessities to be safe and stable and on the road to recovery?'
In a sense, the proposition is 'robbing Peter to pay Paul' by diverting prevention dollars to more beds, Rajlal said. A decrease in prevention services will likely have the downstream effect of more severely mentally ill people seeking treatment beds down the line.
'We as a department are facing a really big time of change and loss in areas that we as a county have been outstanding in in the state,' Rajlal said.
Rajlal said once specific guidelines for housing funds are released, the county will first look into what existing programs qualify before taking on new projects. That could help alleviate the millions of dollars of cuts that remain.
The county hopes to have decisions made on what programs and positions are cut off from funding by November, when it begins building its new budget for the following year. That way there is time for service providers to adjust to the change before the new funding guidelines are implemented in July 2026, Rajlal said.
Across San Luis Obispo County, nonprofit mental health providers are already looking at ways to roll back their programming to comply with the new rules.
At Transitions-Mental Health Association, many of those cuts will come on the prevention side of mental health care — a strategy organizational leaders fear will lead to worse outcomes and a higher caseload down the line.
'We're reeling, as you can imagine, and trying to scramble to figure out what our options are,' executive director Jill Bolster-White said.
Bolster-White said with cuts coming on the prevention side, programs such as workforce entry and re-entry assistance, early mental illness screening and prevention for high school and college students, wellness centers and supportive programs that help people obtain and keep housing all face an uncertain future.
Among those is the group's Transition Assistance and Relapse Prevention — the program Crippen leads.
The program helps those who have been designated as high-risk and in-need of intensive support navigate the behavioral health system and makes routine check-ins on clients' mental and physical health.
The program is no longer being funded under Prop 1, so if Transitions wants to keep it, it will have to find a new funding source.
If the program is cut, Crippen worries his clients will decompensate or relapse.
'They're going to end up in hospitals. They're going to harm themselves,' Crippen told The Tribune. 'They're going to cost the system more.'
Crippen said if his clients lose the support the program provides, they'll likely end up in the hospital, harming themselves, relapsing in substance use, losing housing or getting in trouble with law enforcement.
The program he leads helps people maintain a continuum of care, and care interruptions could have devastating and lasting impacts on his client's well-being, he said.
Others echoed those worries.
'What I worry is that it will increase the number of people who maybe don't know where to go — where to start — and so their symptoms and their issues become more acute,' Bolster-White said. 'The data is super clear that the earlier somebody gets response and treatment and access to support for their mental illness, the better their long term outcomes are, the better that they are to recover and sort of lead just a more traditional kind of lifestyle.
'The further downstream that those services come into play, the worse off people are generally.'
Kaplan said the shift from mental health and prevention to a behavioral health focus brings Transitions-Mental Health closer to a medical agency than a supportive nonprofit, with non-medical expenses likely to suffer.
'What's happening to us is that a lot of our survival is going to come down to, 'Well, can we bill Medi-Cal for this?'' Kaplan said. 'We have to figure out if we can do that without losing our soul, because really, we have been so progressive and so person-oriented for so long that to suddenly turn into a bean-counting, medical-billing agency — that ain't going to cut it.'
By the time of the Jan. 29 meeting, the County had already figured out how to cut $5 million in programs and jobs to comply with Prop 1 funding changes.
One of the ways service providers can keep programs is by ensuring the programs are Medi-Cal billable.
If they are not, the program is more likely to be on the chopping block given the County has $8 million in programs it still has to cut.
The Veterans Outreach Program, which the county started in 2011, is one of the programs that was cut, Warren said.
The program, which was modeled after the Wounded Warrior program through the Marines, engaged with veterans by having a therapist present at planned activities, like kayaking or hiking.
Veterans could go to the activity and just have a conversation with the therapist — not a session — and it eventually made more veterans open to asking for help, he said.
'But that program doesn't live in the new (Behavioral Health Services Act). It's prevention. It's not billable,' Warren said. 'It's not specifically for Medi-Cal clients, so we had to say goodbye to that program and that sucks.'
The County created three tiers in which it will decide what programs can stay and what should be cut.
Top-priority programs to keep, despite not being Medi-Cal billable, are the Community Action Teams — a partnership between law enforcement and mental health providers to respond to people in mental health crises — and Homeless Outreach Teams.
The County is also looking to cut costs by not replacing employees who step down from their positions to pursue other opportunities.
'We are stopping and really looking at that position, and if that position can be absorbed in our avenues and us back filling,' Rajlal said in the Jan. 29 meeting. 'That is a cost reduction that I would rather do as opposed to letting people go.'
Rajlal said service providers can run programs reimbursable by Medi-Cal to make it self-sustaining or find other funding sources like grants if they want to keep programs that will no longer be covered because of Prop 1.
'People have to get creative,' Rajlal said. 'Everybody is trying to figure out where there are areas where we can identify that gaps are going to open up and where we can close them together as a community and work together.'