State to release funds to counties

State officials said Wednesday they would release an unexpected $64 million to counties for mental health care.

The state Department of Mental Health said the money comes from unspent administrative funds generated by Proposition 63, California’s voter-approved, 1% “millionaires’ tax,” established to overhaul the troubled public mental health system. Under Proposition 63 rules, unused money must be disbursed to counties, although the state must approve county plans for spending the funds.

One of the Legislature’s chief advocates for the mentally ill said he hoped the money would be used by counties to continue a successful program for the homeless mentally ill that was cut by Gov. Arnold Schwarzenegger.

The new money is slightly more than the $55 million Schwarzenegger eliminated from the state budget late last month for the homeless program.

The governor’s controversial decision imperiled a program, known as AB 2034 after the bill that created it, that has served 13,000 homeless mentally ill people since 1999. There are about 4,700 participants today.

The cut prompted an outcry among advocates for the mentally ill, who have pledged to sue.

Proposition 63 prohibited the state from dropping below its 2004 funding commitment to mental health. And it barred counties from using Proposition 63 money to compensate for cuts to existing programs.

Still, the governor’s aides suggested when the program for the homeless mentally ill was eliminated that Proposition 63 money could be used to cushion the blow.

To do that, county officials would have to walk a fine legal line.

They could not simply use the newly released money to pay for AB 2034 programs. But they could create new programs that provide services similar to AB 2034’s and pay for them with the new money. Clients themselves would never know the difference, said state Sen. Darrell Steinberg (D-Sacramento), an author of both AB 2034 and Proposition 63.

“It doesn’t diminish our position one inch: that this cut was wrong and potentially violates” Proposition 63, Steinberg said. “But now that we’re on the other side of that fence, our first and foremost responsibility is for the 4,700 people who are relying on these effective services to regain their lives.”

Kirsten Deichert, a Department of Mental Health spokeswoman, said the money released Wednesday was not intended to cover for the loss of AB 2034.

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