CSAC Bulletin Article

No Place Like Home – The Sequel

August 11, 2016

The second act to implement the financing portion of the new No Place Like Home program was released on Tuesday in the form of twin budget bill vehicles: AB 1628 and SB 858.

These bills, both approved by the budget committees in their respective houses this week, outline the path for diverting Mental Health Services Act funds to finance and repay up to $2 billion in bonds. The proceeds from those bonds will be available to counties for building or refurbishing permanent supportive housing units for those who are chronically homeless and living with mental illness.

The budget bills indicate that the California Health Facilities Financing Authority (CHFFA) will sell the bonds and utilize MHSA funding to finance those costs, while the Department of Housing and Community Development (HCD) will receive the bond revenue and develop the guidelines for disbursing the money to counties.

While the amount of MHSA funding that will be diverted is directly related to the bond costs and is therefore unknowable in advance, the state will notify the Controller every six months of the needed amount, which will then be diverted from the overall Proposition 63 receipts during the following six months. After the diversion amount is taken, the remaining funds will be disbursed to counties based on their existing MHSA percentage allotment. No diversions will occur in the current fiscal year.

Further, the budget bills cap the amount of MHSA funding that can be diverted at $140 million, and prohibit any of the diverted funds from being swept into the state’s General Fund. CSAC is especially pleased with both of these new safeguards.

The two new bills also include a technical fix developed by the California Behavioral Health Directors Association (CBHDA) and supported by CSAC to include the two cities that currently receive MHSA funding (Berkeley and the Tri-Cities area).

AB 1618, which was signed into law by the Governor in June, already outlines the eligibility and criteria for counties to participate in the program, but HCD will also need to develop a significant amount of guidelines – in consultation with CSAC – before the money will actually flow to counties.

CSAC has not yet developed a position for the budget bills, but at least one of them must pass the Legislature before the legislative session concludes on August 31.

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