Proposition 2: Authorizes Bonds to Fund Existing Housing Program for Individuals with Mental Illness.
Should $2 billion in bonds be issued and the Mental Health Services Act be amended to fund the No Place Like Home Program?
In 2004 California voters approved Proposition 63 (Prop 63) which was also called the Mental Health Services Act. It provided funding for county mental health services by increasing the income tax paid by people with an income over $1 million. Counties are responsible for providing mental health care for people that lack private health insurance. Some counties also provide for other housing, substance abuse treatment and other services for those suffering mental illness
The Legislature passed the No Place Like Home Act of 2016 (NPLHA). This Act authorizes $2 billion in bonds for use by counties for permanent supportive housing to house people who are eligible for treatment under Prop 63 and are homeless or at risk of chronic homelessness. The bonds were to be paid off with interest over 30 years using money from the revenue raised by Prop 63. A system for awarding the bond money to counties and for establishing programs to use it was also created by these bills.
No bonds were issued under the NPLHA because the state must ask for a court decision that the legislation is within the scope of Prop. 63 in extending housing to people with substance abuse and other issues rather than solely for severely mentally ill patients. The court is to determine if voters must approve the bond. The court decision is pending.
This proposition approves the No Place Like Home Act of 2016 and approves the issuance of $2 billion in bonds to support the program. It also amends the provisions of Prop 63 to allow use of the revenue for NPLHA. No more than $140 million each year can be used for this program.
There is no direct impact on the state budget because the bonds are to be paid back up to $140 million annually from the funds generated by Prop 63. to repay up to $2 billion in bonds used to pay for the No Place Like Home programs. It is estimated that the bonds would be paid off in 30 years at 4.2% interest for approximately $120 million each year.