Governor's Budget - No Surprises
EPSDT to be Realigned; DMH and ADP go to DHCS
Tax Increase Initiative to ensure Realignment funding and avoid cuts in Education
MHSA Revenues forecast for Big Increase in 12-13

Written by Rusty Selix, Executive Director

Balancing the Budget

Governor Brown released his proposed 2012-13 budget this afternoon. Complete details and a detailed summary are available at

Building on what was proposed last year the budget will realign the EPSDT mental health MediCal program for children to counties meaning that counties will receive funds on a formula basis and not be able to make claims to the state for excess costs. We do not yet have the details on that formula. The rest of mental health programs have already been realigned and will be distributed based upon current formulas. The proposal includes separate subaccounts for each realigned program with the ability to transfer up to 10% of funds from one account to another. (just as the 1991 realignment did).

Funding for the realigned programs would be constitutionally protected if voters approve an initiative that increases sales and income taxes. The realignment itself and the funds are not contingent upon passage of the initiative.

The initiative would also avoid significant education cuts that would be triggered if the measure fails. There are no additional health related cuts that would be triggered.

The budget has a few additional cuts in health and human services, but at first glance none appear to significantly affect mental health services or people with severe mental illnesses.

Major savings are projected by moving people with both MediCal and Medicare eligibility (dual eligible) into an integrated single managed care plan that will be phased in over three years with 8-10 counties projected to implement this in 12-13.

Restructuring Mental Health and Alcohol and Drug Governance

As proposed last year the Departments of Mental Health and Alcohol and Drug would be eliminated and nearly all of their functions transferred to the Department of Health Care Services. It does not rename that department to make mental health part of the name of the department as we had proposed. It also places community care facility licensing at the Department of Social Services. This would be problematic unless the state accepts our proposal to utilize a provision of state law that eliminates state licensing for county funded mental health programs operated by nonprofit contractors. The office of MultiCultural Services is proposed to be transferred to the Department of Public Health. Contracts with consumer and family organizations are transferred to the Mental Health Services Oversight and Accountability Commission. MHSA Education and Training programs are transferred to the Office of Statewide Health Planning and Development which administers programs in other areas of workforce development. To make these changes requires a complex piece of legislation and it is expected that it will change significantly as legislators weigh in and we will continue to press the points in our position paper prepared in October.

Proposition 63/Mental Health Services Act Revenues

The best news in the Governor's budget proposal is in the revenue projections for the Mental Health Services Act/Proposition 63 tax on millionaires. The budget documents calculate the revenues from 2010-11 as $1.02 Billion, estimates that for the current 11-12 year they will be $1.15 Billion and projects a dramatic increase to $1.47 Billion for 12-13. Besides the projected increase from 11-12 to 12-13 the calculation for 10-11 and the estimate for 12-13 are also much higher than the Governor's budget calculated one year ago and which were the basis for funding distributions to counties for 11-12. In January 2011 the estimates for 10-11 were $891 million and the projections for 11-12 were $924 million. The new calculations reflect increases of $130 million for 2010-11 and $220 million for 11-12.

Because there are delays in when increases and decreases in MHSA funds are reflected in allocations to counties these increases do not determine how much the funds for counties for 2012-13 will be increased above 11-12. However, this is very positive news and when those allocations are calculated this spring these increased projections will be accounted for to determine the amounts available for allocations to counties for MHSA programs- mainly community services and supports and prevention and education.

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