Background: Whether to Tax Wealthy Californians to Help the Mentally Ill
Before embarking on a campaign to convince voters that millionaires ought to be taxed to pay for expanded mental health services, backers did some polling. Early last year, the California Council of Community Mental Health Agencies found that Californians who favored the idea—now Proposition 63—outnumbered likely antagonists by more than two to one.
And other interesting facts emerged, according to Assembly Member Darrell Steinberg (D-Sacramento), who is leading the fight for Prop. 63. First, nearly half of the people interviewed said that “they themselves, a family member, or a close friend had suffered from serious mental illness. It’s much more prevalent than people realize or want to admit.”
Also, says Steinberg, the polling found that “People who didn’t know anything else about California history knew about Ronald Reagan and the legislature shutting the mental hospitals.”
Background: Goodbye to the cuckoo’s nest
In 1967, Governor Ronald Reagan signed a landmark bill—the Lanterman-Petris-Short Act—that had bipartisan support. LPS effectively emptied the state’s mental hospitals. Public care of adults and children with mental illnesses was delegated to a system of community-based programs created under the Short-Doyle Act in the 1950s. Reagan proudly announced that he was closing several state mental facilities and eliminating 1,700 staff jobs.
The intent was essentially benevolent. Five years earlier, Ken Kesey’s novel One Flew Over the Cuckoo’s Nest had aroused the nation to the plight of patients—including vagabonds, public drunks, misbehaving children, and impoverished elders—walled away against their will, drugged, shackled, shocked, lobotomized in antiquated public institutions where many languished indefinitely.
LPS changed that. Under section 5150 of the act, only people who pose imminent danger to themselves or others, or who are unable to care for themselves, can be taken into custody for treatment and evaluation. And then they can be held for no more than three days without a hearing before a judge.
As an alternative to hospitalization, LPS required California’s counties to provide the services locally that were needed by people with mental illness. The state would assume 90 percent of the costs and the money would “follow the patients,” the legislature promised. But in 1973, budgetary pressures led lawmakers to cap the state outlay. Only cost-of-living increases have been applied during the intervening three decades—and not even those, most recently.
Promises unkept
Advocates for the mentally ill applauded the reforms embodied in LPS. Respecting individual autonomy and bringing comprehensive services into reach within the community are social goods. But for many patients, de-institutionalization meant the opportunity to huddle in doorways, cardboard boxes, cars, or temporary shelters. Homeless and without support, they often neglected to take their medications. Relapses meant section 5150 holds and a renewal of the destructive sequence.
Nor did counties have the resources, especially given the state’s diminishing contributions, to follow through on the promises of LPS. Local jails and prisons became and remain California’s primary de facto inpatient mental health facilities. San Francisco police alone answer up to 9,000 section 5150 calls each year—a quarter involving a homeless person. The person is lodged in a cell for an average of 17 hours, at a cost per incident of about $1,800 in police time and emergency psychiatric care, the San Francisco Police Department reports.
In 1991, along with a mandate that every county maintain a community mental health program (or collaborate to provide one), California’s 58 counties were permitted to tailor whatever services they offered to fit their budgets. The counties were given a dedicated source of funding—5 percent of state sales tax collections and 24.3 percent of vehicle license fee revenues. But those “realignment” funds have fluctuated and failed to grow as projected. The scope of local services has shrunk.
From a state budget standpoint, the hand-off of responsibility for mental health services has been a good deal. There are now about 4,400 patients in California’s four state-run mental hospitals (Atascadero, Metropolitan, Napa, and Patton, with a fifth under construction in Coalinga), as compared to nearly 36,000 the year LPS was implemented. Since 1973, only about 2 percent of the state’s general fund has been devoted to mental health services in the community—half the commitment of prior years— according to Steinberg.
Meanwhile, the population in need is substantial. One in five people will experience some form of mental illness during a lifetime, the World Health Organization reports; in any given year, almost one in ten will be suffering from a depressive disorder. There are 36 million Californians. Among them are an estimated 300,000 homeless, of whom one in six, or about 50,000, are believed to be mentally ill.
Systems-of-care concept provides “whatever it takes”
In 2001-02, California counties spent a total of $2.9 billion to deliver mental health services to 626,000 clients. The federal government picked up a little over a fourth of the tab, the state just over half, and the recipients themselves chipped in a fifth through out-of-pocket payments or insurance reimbursements. (See chart.)
Recently, many counties have begun to implement what is called a systems-of-care (SOC) approach to meeting the needs of people with mental illness. The SOC concept has been the fundamental organizing principle for children’s mental health services for the last decade in California, although only about 4,000 children statewide are currently enrolled in such services. Meanwhile, a few SOC programs have gradually been extended to adults and the elderly.
As described by the state Department of Mental Health, SOC models feature “voluntary participation of members (clients) in each service identified in a personal service plan, provision of services on a capitated and 24-hour basis to meet all members’ needs, including housing, supported and competitive employment, socialization, education, rehabilitation, legal assistance, money management, mental health treatment, and physical health and dental care.”
Information, counseling, respite, and other services for family members are also provided under SOC models, which are based, explains the DMH, on a recognition that “effective services are those that are specifically designed to meet the needs of an individual consumer. Therefore, the cultural, gender, and age related issues central to understanding the individual consumer also become essential to providing effective services.”
Pilots show measurable success
In 1999, three pilot programs grounded in SOC principles—offering integrated, “whatever-it-takes” support services coordinated by an individual case manager—were funded under AB 34, introduced by Steinberg. The programs targeted homeless people with serious mental disorders in Los Angeles, Sacramento, and Stanislaus counties.
With future funding predicated on a demonstration of effectiveness, the three AB 34 pilots proved so successful that the legislature passed follow-up expansions sponsored by Steinberg in 2000 and 2001. The initial state allocation of $10 million was increased to $55 million, and AB 34 programs were extended to 30 counties. In 2001 an additional $10 million was budgeted and five more county programs funded. Today, there are 54 statewide—19 in Los Angeles County.
As of last year, according to the DMH, 4,881 homeless clients had been served by AB 34 programs. They report notable success:
• Days of psychiatric hospitalization dropped 56 percent.
• Days of incarceration dropped 72 percent.
• Days spent homeless dropped 67 percent.
• Days of full-time employment increased 65 percent.
• Days of part-time employment increased 53 percent.
Conservatively, the DMH estimated, the programs resulted in savings to the public of more than $27 million through avoided psychiatric hospitalizations, jailings, and ER visits. Not counted were the reduced costs to local judicial systems or made-up tax revenues from businesses that flourish when the mentally ill are shepherded off the streets and restored to functioning status. (Extensive details are provided by the DMH.)
Nevertheless, state funding for AB 34 programs has been held at $55 million for the last two years, and that is the level maintained in the 2004-05 state budget (it was $65 million in 2001-02). The $20 million annual state funding for children’s SOC programs was eliminated in the current budget. Numbers indicate that only about 10 percent of potential mental health beneficiaries are being served.
If Prop.63 passes it would generate about $275 million in new revenue for mental health programs in 2004-05, and the amount would swell in subsequent years.
Choosing the ballot initiative route
Prop. 63 proponent Darrell Steinberg says his cause “is mental disability and mental health—another civil rights issue, pure and simple.”
The first bill he introduced after winning election to the state Assembly in 1998 was AB 34, which helped him win a “Rookie of the Year Award” from California Journal, a magazine that covers the legislature. Now at the end of his third two-year term—he must leave the Assembly in January under term-limit rules, but hopes to return as a state senator in 2006.
He’d hoped the results of the AB 34 model of integrated mental health services would generate enthusiasm among his colleagues for widespread expansion of the programs. But as time passed, he says, “I came to the conclusion that unfortunately, the state government would never make mental health the priority it should be.”
Indeed, he laments, “this year money is so tight that bills with costs associated with them are just not likely to pass both houses of the legislature and be signed into law by the governor. If Prop. 63 were a bill, it would surely die in the suspense file.”
Still, Steinberg resisted the idea of going directly to the voters, notes Rusty Selix, executive director of the California Council of Community Mental Health Agencies. As early as 2001, says Selix, though he and Steinberg were “mutually frustrated by our inability to grow this perfect program,” Steinberg demurred when Selix suggested the ballot measure option for the 2002 cycle. “He said, ‘Let’s not. It might hurt our chances of getting legislation passed.’”
By the fall of 2002, however, Steinberg’s patience was unraveling and he was hearing the loud tick of the term-limit clock. “I realized my time was getting short,” he says. “And 36 years is long enough to wait. The ballot route ought to be reserved for extraordinary situations. This is an extraordinary situation.”
Selix repaired immediately to his 15-member CCCMHA board and asked, “How committed are you? How willing are you to spend money on this?” He recalls the reply: “If you can get a first-rate campaign firm and a polling firm to tell us this is a winner,” they would each put up $20,000 to start the ball rolling.
The method deemed most viable
The polls, by Fairbank, Maslin, Maullin & Associates, a Santa Monica public opinion survey firm, were—as noted—encouraging. Several potential funding mechanisms for expanding mental health services statewide were compared too. Respondents, says Selix, reacted favorably to the method he and Steinberg ultimately deemed most viable in the economic and political climate: a “rich-tax.” As it was, they reasoned, the top tier of taxpayers would reap disproportionate benefits from the 2003 federal tax reductions enacted by the Bush Administration. (The tax rate for the highest bracket of income earners was lowered by 3.6 percent, capital gains taxes by 15 percent, and taxes on dividends by 23.6 percent.) Moreover, property taxes are lower in California than in most other states.
Some 25,000-30,000 Californians could be subject to the surcharge. Their average pre-tax income is $5 million. California’s personal tax rates currently range from 1 percent to 9.3 percent.
A portion of the costs, proponents point out, would be offset by reductions in the burdens on state prisons and county jails, police departments, hospitals, homeless shelters, and social services programs. Although difficult to quantify, such reductions would probably amount to several hundreds of millions of dollars annually, according to the Legislative Analyst’s Office.
Fundraising to qualify the measure for the November 2004 ballot and to mount a campaign began in earnest. The target, says Selix, was a war chest of $5 million. “If we can get that much we’re 90 percent sure we can get this bill passed,” he says. “If not, there’s less certainty.”
Petition circulation—managed by Progressive Campaigns, Inc., of Santa Monica—itself ate up the first $1 million. A host of organizations and individuals chipped in amounts ranging from a few dollars to $100,000. They included: the clinics, programs, and agencies that comprise the CCCMHA and the Mental Health Association in California (of which Selix is also executive director), individual physicians, executives, staff, advocates for the mentally ill, former patients, their families and friends. The biggest donation came from the Service Employees International Union, the primary organizer of the state’s mental health agency employees. (See MoneyWatch for updates.)
In March, at a press conference on the Capitol steps, Steinberg and the newly formed Campaign for Mental Health turned in 643,000 signatures. That was 270,000 more than necessary to qualify the measure for the ballot. Advised by progressive campaign consultants Zimmerman and Markman, Inc, of Santa Monica, the Campaign for Mental Health also debuted a sophisticated Internet site.
The Web site features daily entries by Steinberg in a Web log, or blog, as well as inspirational personal stories contributed by supporters. The stories are all signed: Eliminating the stigma that attaches to mental illness is a major corollary to the campaign. Also included are team fundraising competition pages, online donation and email update options, and other features.
Proposition 63 has garnered an eclectic roster of supporters: California Teachers Association; California Police Chiefs Association; California Medical Association; California State PTA; California Nurses Association; Congress of California Seniors; and a panoply of political bodies, Democratic legislators, and community leaders.
So far, voters who are aware of the proposition seem receptive. According to the Field Poll released August 15, likely Yes voters outnumbered No voters 59 percent to 29 percent. (See PollWatch for more information.)
Opposition: “We don’t like discriminatory tax policies”
Kris Vosburgh volunteers that he isn’t among the one-tenth of 1 percent of Californians whose lofty incomes place them in jeopardy of a Prop. 63 tax bite, but he nevertheless speaks on their behalf as a strong opponent of the measure.
Vosburgh is executive director of the Howard Jarvis Taxpayers Association. The Los Angeles-based organization numbers few millionaires among the 200,000 single-family homeowners it represents—zealous guardians of the property tax relief they won through the initiative process in 1978. Even so, says Vosburgh, “we don’t like discriminatory tax policies, where you pick off the stragglers. This is manipulative, to go after a specific group for a specific measure. If you’re taxing millionaires, why not people who make $500,000 next? And so on. Where do you draw the line? If a program is worthy, the state has to reprioritize existing spending.”
Jon Coupal, an attorney and president of Vosburgh’s association, characterizes Prop. 63 as “sponsored by left-wing Assemblyman Darrell Steinberg and those with a vested interest in the mental health care industry.” Coupal says proponents recognize that “any talk of tax increases is not popular in one of the most heavily taxed states in America; therefore they target the ‘rich.’” Unfortunately, adds Coupal, “they don’t realize that those who are the wealthiest among us are also shouldering most of the tax burden in this state. And schemes like this are precisely what are driving them—and their tax dollars—out of California in record numbers.”
The result, he maintains, is “less, not more tax revenue for the Golden State.” Moreover, he argues, Prop. 63 “feeds and expands an ineffective system. Building on a problematic bureaucracy doesn’t make it better…only bigger.”
The same arguments are voiced by several Republican legislators, among them Senator Roy Ashburn of Bakersfield and Assembly Members Tim Leslie of El Dorado County and Ray Haynes, whose district includes parts of San Diego and Riverside counties. The latter two have signed arguments against the initiative that will appear in the voter’s pamphlet.
Opponents have formed their own organization, Citizens for a Healthy California. It bills itself as a “coalition whose membership spans the state, and includes local businesses, taxpayers, medical specialists, civil servants, elected representatives, citizens’ groups, and many others that simply want to see proven, affordable solutions for the problems we face—not just more taxes.”
Spokesman David Yow won’t specify exactly who these people are. But the Citizens for a Healthy California Web site charges: “The bureaucratic allies of Steinberg have a narrow-minded approach to treating illness, and do not produce the results they claim. Medically, their approaches fill people with drugs, but do not give them a cure. Politically, they define ‘mental illness’ so broadly as to include nearly everybody. And scientifically, their methods are incomplete, and leave out of the equation the physical and environmental factors that impact a person’s health and well-being.”
These are charges often leveled by the Citizens Commission on Human Rights, a Los Angeles-based “independent body to investigate and expose psychiatric violations of human rights.” It was established by the Church of Scientology. Requests for comment by the CCHR have gone unanswered.
Matsonian Group, LLC, a Sacramento communications company, is managing the opposition to Proposition 63. “This is the wrong time for the wrong measure,” summarizes Yow, Matsonian’s director of political affairs. The tax surcharge is “such a shaky, volatile source, the people who’re supposed to benefit can’t count on the plan working too far into the future. The measure is actually going to end up hurting the status of mental health and other social programs.”
David O. Weber did the reporting and writing for this article.
