MHSA update

1) Shrinkage of MHSA dollars - Ventura County Star reporter Kathleen Wilson wrote in January that MHSA monies are in danger of shrinking. She reports that while initially California’s tax on millionaires for care of the mentally ill has brought twice as much money as expected it is headed for a fall with the plunge in the stock market per state finance officials.Before voters passed Proposition 63 in 2004, analysts estimated the tax on California’s wealthiest residents would yield $750 million annually. But the 1 percent tax on personal income above $1 million produced a windfall of $1.3 billion to $1.5 billion a year.Now with the market wiping out investment gains, the Department of Finance is projecting the pot will drop to $981 million this fiscal year and to $887 million next year.
2) Redirection of MHSA dollars - As is noted above , the budget as it is now passed and signed, will “redirect” $226 million in Prop 63 funds for 2009-10 and up to $234 million for 2010-11 to assisting the state in paying for EPSDT services. The measure diverting Prop 63/MHSA funds is SB3x-10 and the measure calling for the special election is AB3x-11.
The measure simply redirects this amount of funds on July 1 , 2009 and on July 1 , 2010. It is silent on what part of Prop 63/MHSA funds this comes from and most likely that will not be decided until after the election – should the voters approve this measure now known as Proposition 1E.