Opposition to Cuts in Governor Newsom’s May Revise Budget Proposal 2025-2026

June 3^rd, 2025 

RE: Opposition to Cuts in Governor Newsom’s May Revise Budget Proposal 

  Dear Chairs Wiener, Gabriel, Addis and Weber Pierson,    

 Mental Health America of California (MHAC) is a peer-run organization leading the state in behavioral health public policy and advocacy since 1957. The mission of MHAC is to assist and encourage communities, families and individuals to experience hope, wellness and recovery from mental health and substance use disorder issues. The people and communities we aim to serve include those of all ages; sexual orientation, gender identity or expression; language, racial and ethnic backgrounds, national origin, and immigration status; spirituality and religious affiliations; or socioeconomic status. 

As California faces a staggering $12 billion budget deficit, the state must prioritize and preserve the vital mental health and substance use supports and services that Californians depend on. These supports and services have proven to be effective in reducing long term state costs related to criminal justice involvement, emergency hospitalization, and institutionalization. MHAC opposes the following proposals in Governor Newsom’s May Revise and urges action from the Assembly and Senate to preserve funding for the following supports and services:  

Peer Support Personnel Training and Placement Program 
This program provides grants to community-based organizations to train and place individuals with lived experience, or peers, to work as Medi-Cal Certified Peer Support Specialists. Peer Support Specialists provide a wide range of services including crisis support, individualized wellness planning, and trauma informed care. In addition to being an evidence-based practice, it is essential to address the state’s behavioral workforce shortage and meet the growing demand for mental health and substance use services. MHAC requests an annual apportionment of $14 million a year, $4 million from the Behavioral Health Services Fund, and $10 million from the General Fund to continue producing trained behavioral health professionals.  

California Peer-Run Warm Line 
The California Peer Run Warm Line is a 24/7 telephone and text line that provides peer-led, non-coercive, and stigma-reducing support that addresses a wide range of challenges, including anxiety, depression, and substance use. 77% of users surveyed indicated a reduced likelihood of needing emergency services such as 911, suicide prevention, and emergency room visits. These services provide an alternative to costly crisis intervention services and can ensure individuals of all demographics can be served. The CA Peer Run Warm Line continues to see a rise in calls and to meet the rising demand the state must fully fund it. MHAC requests $25 million annually for FY25-26 and FY26-27 in order to continue this vital 24/7 support. 

Mental Health Wellness Act (MHWA)  
The current proposal eliminates $20 million in annual grant funding that would improve access to and expand capacity for vital behavioral health services. These grants would provide needed funding for the following vital behavioral health supports and services: 

• Peer Respites 

Peer Respite is a voluntary service that provides community-based support to people experiencing or at risk of experiencing a mental health crisis. Services include but are not limited to peer support, linkages to mental health support or resources, short-term overnight stays, and individualized care support planning. Peer Respites are effective in reducing hospitalization and incarceration, resulting in improved long-term health outcomes and reduced costs to the state’s behavioral health system. Sustaining and growing Peer Respites also supports the development of the California behavioral health workforce, aligning with the state’s investments in Peer Support Personnel. 

• Full-Service Partnerships (FSP) 

FSPs offer person centered wrap around support with a “whatever it takes” approach for people with severe mental health challenges, prioritizing those who are unhoused, have a history of being justice involvement, or have experienced multiple hospitalizations. In 2023, the Behavioral Health Services Oversight and Accountability Commission reported that FSP participants experienced a 54% reduction in emergency room visits, a rapid reduction in emergency mental health services, and a 47% reduction in justice involvement. As the Behavioral Health Services Act funding has been reduced for FSPs, MHWA funding is now essential to support technical assistance and capacity building that strengthens and improves service delivery. 

Gender Health Equity Section (GHES) at the Department of Public Health 
GHES develops programs and policies intended to eliminate gender-based health disparities in California through the following grant programs: 

• The Lesbian, Bisexual, Transgender & Queer (LBTQ) Unit, which centers community solutions and leadership to eliminate health disparities and research gaps impacting diverse LBTQ Californians. 

• The Wellness & Equity Unit, Transgender, Gender Diverse and Intersex (TGI) Unit which exists to elevate health equity issues experienced by TGI people caused by systemic discrimination in healthcare settings, housing, employment, and public accommodations. 

• Wellness and Equity Unit, and the Reproductive Freedom and Abortion Access (RFAA) Unit which addresses issues related to reproductive freedom and justice, abortion access and focus attention on California communities who historically and/or systemically experience inequities related to access to related services. 

The proposed budget seeks to reduce $14 million in local assistance that supports these LGBTQ+ and reproductive health programs. LGBTQ+ individuals are experiencing heightened anxiety, depression, and risk of suicide due to the current political climate, most notably the attacks on the transgender community. The transgender community faces discriminatory barriers to housing, healthcare, and public facilities creating hostile and unwelcoming environments. Preserving funding for these programs is essential to addressing the institutional gaps in care for the LGBTQ+ community and improving long term health outcomes. 

Phase II of the California Reducing Disparities Project (CRDP) 
CRDP is a statewide mental health initiative targeting five populations in California that have been historically unserved, underserved, and inappropriately served: African Americans, Asians and Pacific Islanders (API), Latinos, Lesbian, Gay, Bisexual, Transgender, Queer, and Questioning (LGBTQ), and Native Americans. Grants are awarded to local community-based organizations (CBO) to help serve these populations and provide an analysis of solutions for reducing mental health disparities. The May Revise proposes reverting $15.8 million previously allocated to this initiative, threatening to stop funding to CBOs currently in progress of executing their awarded grant. In addition to disrupting care being provided, this budget reversion would threaten the existence of these CBOs and their programs.  

Individuals 19 and Older with Unsatisfactory Immigration Status (IUIS)  
The proposed budget freezes new enrollment into Full-Scope Medi-Cal, enacts a $100 monthly premium on current enrollees, and lowers reimbursement rates to federally qualified health centers (FQHC) for services to IUIS. This proposal would prevent one of our most underserved populations from accessing vital behavioral health services. Additionally, lower reimbursement rates to federally qualified health centers would not just impact services to IUIS, but would also impact FQHC’s fiscal operation, thus impacting the services it provides to their entire community.  

Medi-Cal Asset Limits  
This policy would reinstate Medi-Cal asset limits (which were removed by the Legislature in 2024) for seniors and people with disabilities, resulting in individuals from this population with more than $2,000 in assets or a couple with more than $3,000 in assets to be ineligible for Medi-Cal. This is a significant reduction that would prevent many of those in the most need of assistance from accessing vital behavioral health supports and services. 

MHAC is committed to the mental health and wellness of all Californians regardless of immigration status, race, ethnicity, sexual orientation, or gender. Governor Newsom’s May Revise proposes significant cuts to investments in mental healthcare that will negatively impact diversity, equity, and inclusion. These proposed cuts will strip essential services from historically underserved communities, pushing more individuals to experience impacts to their behavioral health and deepening health disparities.  

Without continued investments in voluntary, culturally responsive, community based mental health and substance use supports and services, California will overburden our emergency systems, increasing hospitalization, institutionalization, and the criminalization of individuals with unmet behavioral health needs. 

Mental Health America of California urges you to reject the proposed cuts and preserve funding for mental health support and services that meet Californians where they are. If you have any questions, or if MHAC can provide any assistance on this budget please do not hesitate to contact me at hstrunk@mhac.org or our Director of Public Policy, Karen Vicari, at kvicari@mhaofca.org.  

In Community,    

Heidi L. Strunk    
President & CEO  

  

CC: Paula Villescaz, Deputy Legislative Affairs Secretary, Office of Governor Gavin Newsom  
Richard Figueroa, Deputy Cabinet Secretary, Office of Governor Gavin Newsom 
Michelle Baass, Director, California Department of Health Care Services 
Dr. Erica Pan, Director, California Department of Public Health 
Kendra Zoller, Deputy Director of Legislative & External Affairs, Commission for Behavioral Health