March 23, 2023

Following a four day “Tour of the State,” Governor Gavin Newsom delivered a letter to the Legislature this week, fulfilling his annual duty to report to the Legislature on the condition of the state. The letter, which was delivered in lieu of a formal speech, highlights the Administration’s accomplishments over the past four years and the major policy announcements made on his statewide tour of California.

REDUCING HOMELESSNESS
WHEN: Thursday, March 16, 2023, at 1:00 p.m. 
WHERE: Sacramento, CA

Governor Gavin Newsom kicked off the first stop on his statewide tour in Sacramento to announce the procurement of 1,200 tiny homes to be used for interim housing for those experiencing homelessness. The units, which are intended to be prioritized for those living in encampments, will be delivered to four local jurisdictions free of charge by the California National Guard. Local jurisdictions will be responsible for finding locations for the units, providing services, recruiting residents, and piecing together funding for ongoing operation. The units will be distributed as follows:

• Los Angeles: 500 units
• Sacramento: 350 units
• San Jose: 200 units
• County of San Diego: 150 units

In addition, Governor Newsom announced the release of $1 billion in Homeless Housing, Assistance, and Prevention (HHAP) Round 4 funding. HHAP Round 4, which was appropriated through last year’s budget and provides flexible funding to counties, large cities, continuums of care, and tribal governments to support local efforts to reduce the number of unsheltered residents, increase the permanent housing supply for those experiencing homelessness, and expand regional capacity to build and scale local homelessness response systems.  

IMPROVING PUBLIC SAFETY
WHEN: Friday, March 17, 2023, at 11:30 a.m. 
WHERE: Bay Area

On his second stop on his statewide tour, Governor Newsom announced plans to transform the San Quentin State Prison into a new facility focused on improving public safety through rehabilitation and education. The prison will be renamed “San Quentin Rehabilitation Center” to align with the transformation and is intended to serve as a nationwide model to advance a more effective justice system. The Governor’s 2023-24 budget proposal includes $20 million to kickstart the redesign of the facility, which will be led in part by an advisory group made up of criminal justice experts, crime victims and survivors, formerly incarcerated individuals, staff, key state-level stakeholders, advocates, and volunteers.

REDUCING HEALTH CARE COSTS 
WHEN: Saturday, March 18, 2023, at 11:00 a.m. 
WHERE: Los Angeles, CA

On his third stop of the “Tour of the State,” the Governor was in Los Angeles to announce the state’s recent efforts to address the cost of prescription drugs. The Governor announced that CalRx has secured a contract with CIVICA, a manufacturer that will produce $30 insulin, to be made available to all, regardless of insurance plan. According to the announcement, this will bring down the price of insulin by about 90 percent, saving cash-paying patients between $2,000 and $4,000 annually. 

The Governor also announced that the state will be undertaking efforts to manufacture its own Naloxone, a medication that is used to reverse the effects of an opioid overdose. The Administration reported that CIVICA is working with the California Health and Human Services Agency to identify a potential California-based manufacturing facility, and that the state is exploring bringing Naloxone to the market next – as part of California’s Master Fentanyl Plan. For more information on these efforts, visit the CalRx website.

MENTAL HEALTH CARE REFORM
WHEN: Sunday, March 19, 2023, at 1:00 p.m. 
WHERE: San Diego, CA

And finally, in San Diego on Sunday afternoon, Governor Newsom announced his proposal to modernize the state’s behavioral health system and create more behavioral health housing. The Governor’s proposal consists of three main elements: 

• A multi-billion-dollar general obligation bond to finance the construction of new community mental health facilities throughout the state.
• Reforms to the Mental Health Services Act (MHSA), directing $1 billion annually to pay for housing and other community-based residential solutions, expanding treatment eligibility to include those with substance use disorders, and creating greater flexibility in the use of remaining MHSA funds.
• Alignment of behavioral health benefits across all health plans in California and new accountability and oversight measures for county behavioral health plans.

CSAC’s response to the Governor’s announcement is available here. On Sunday evening, the Governor issued a  press release specifying that in partnership with Senator Eggman, the proposed next step will be an initiative to go on the 2024 ballot that would do the following:

• Authorize a general obligation bond to build new community behavioral health beds in residential settings and provide more funding specifically for housing homeless veterans. According to the California Health and Human Services Agency summary of the proposal, the bond would total $3.6 billion, including $600 million to house homeless veterans.
• Amend the MHSA, to dedicate at least $1 billion every year in local assistance to behavioral health housing and residential services for people experiencing mental illness, and allow MHSA funds to serve people with substance use disorders.

• Include new accountability and oversight measures for counties to improve performance. 

As to what comes next, the Governor’s press release states, “The Administration plans to work in close partnership with legislative leaders in this space including Senator Eggman and Assemblymember Jacqui Irwin, as well as with the California State Association of Counties, other critical local government stakeholders, community-based service organizations, advocates, and people with lived experience as bill language is developed.” This is a welcomed invitation to assist in crafting the details and ensuring that the definition of accountability applies to all levels of government and is focused on the need for a comprehensive system to address homelessness.  

CSAC believes there is opportunity to shape this proposal to make MHSA work better for communities and will be engaged throughout the legislative process. Further, the Governor and Legislature’s focus on modernizing the MHSA aligns with CSAC’s overall efforts to address homelessness with the AT HOME Plan.