Santa Clara County received zero Proposition 1 help from Gov. Gavin Newsom to expand its mental health facilities, despite him turning up the pressure on counties to provide more treatment beds.
Last month, Newsom announced $3.3 billion in Prop. 1 grants to 126 recipients across the state. Santa Clara County was left out. The county sought funding for three projects — the development of a skilled nursing facility in Morgan Hill, construction of a mental health facility on Jose Figueres Avenue and renovation of a substance use residential facility on North Morrison Avenue, both in San Jose.
The $6.4 billion bond pushed by the governor was narrowly passed last year. The bond sets aside $4.4 billion for the construction of treatment beds for people with mental illness and substance use issues. The other $2 billion is to be used to construct housing for the same population, with a majority of housing reserved for homeless veterans.
“It’s hard to not feel a significant personal disappointment that external factors are inhibiting our forward progress,” District 4 County Supervisor Susan Ellenberg told San José Spotlight. “The governor promoted Proposition 1 in the context of counties need to do more to provide mental health services. We submitted three outstanding projects. None of them were awarded.”
Santa Clara County sought a $74.2 million grant for its largest project at 101 Jose Figueres Ave., which would’ve added 58 beds. The county wants to demolish the outdated crisis stabilization unit and redevelop it into a two-story, 83-bed mental health facility. A portion of the facility will be set aside for acute in-patient care. It’s unclear how the county’s projects will move forward.
A spokesperson for the county Behavioral Health Services Department told San José Spotlight they received no reason why the county-owned projects didn’t receive any funding. Staff plan to resubmit the applications to the second and final round of Prop. 1 money, which recently opened, and search for other sources of funding.
Ellenberg said she’s further frustrated Prop. 1 was funded by taking away dollars from the Mental Health Services Act, eating away at more of the county’s money to address its mental health crisis.
Rewriting the rules
Prop. 1 rewrote the Mental Health Services Act, which voters approved in 2004 to create a 1% tax on people whose income is more than $1 million dollars to pay for mental health services. The state normally raises between $2 billion to $3.5 billion each year from this tax, according to the Legislative Analyst’s Office. Prop. 1 shifted more money generated by this “millionaire’s tax” to state programs, from 5% to 10%. As a result, Santa Clara County will lose about $6.6 million each year when the next fiscal year starts in July.
Prop. 1 also changed the way money from this tax would be used, requiring 30% of funding to support housing, primarily for homeless people. This removed the flexibility counties had to spend funds on other mental health services, such as outreach and responding to those in a crisis. Prop. 1 also renamed the Mental Health Services Act to the Behavioral Health Services Act.
“Part of the consolation that I felt as a supervisor was OK, at least we’ll get (the funding) back through Prop.1, but to not be able to realize the return of any of those dollars that we lost through the transition from MHSA to BHSA really ties our hands,” Ellenberg said.
In 2022, Ellenberg and Supervisor Otto Lee declared a mental health crisis in the county due to the lack of treatment beds and called for more investments and a coordinated response. Since then, the county has added 208 beds, including 53 acute in-patient psychiatric beds at for-profit San Jose Behavioral Health.
The county has 1,268 beds for various levels of treatment: 374 beds in locked facilities for acute need, 322 beds in skilled nursing facilities and mental health rehabilitation centers, 378 beds in residential adult facilities for people with mental health issues and 194 beds for people detoxing from substance use. The county’s goal is to have about 1,600 beds by the end of 2030.
While the grants for the county’s projects didn’t come though, three privately-owned projects received Prop. 1 funding: A 108-bed skilled nursing facility in Morgan Hill run by 439 S 4th St LLC, a 60-bed crisis residential in San Jose run by Heritage Villa LLC and a 60-bed substance use treatment facility in Gilroy run by nonprofit HealthRIGHT 360. The facilities are slated to open between winter 2026 and spring 2027. In total, these three facilities received $42 million in state funding and will add 228 treatment beds in the county.
Getting Prop. 1 funding in this last round is going to be tough. There’s only about $800 million left for mental health and substance treatment facilities. The state plans to prioritize grants for rural areas and counties that didn’t received funding in the first round, according to the state website.
Ellenberg said the county will work with the three awardees to see how many beds it can license to serve its clients.
“I’m delighted for the three grants that were awarded. We need the beds,” Ellenberg said. “Better those three than nothing at all.”
Vitka Eisen, CEO of HealthRight 360, said she’s excited to bring a substance use residential treatment center to a historically underserved region.
The 60-bed facility, slated to open by next winter, will provide people with up to 90-day stays and withdrawal treatment to help those with addiction. In addition, residents will receive counseling, get linked to job training and participate in individual and group activities like attending a concert.
“Recovery is more than just stopping using drugs,” Eisen told San José Spotlight. “It’s like creating a new life, finding things that replace the time people have spent using drugs with other things that give them joy and pleasure.”
Contact Joyce Chu at [email protected], or @joyce_speaks on X.
Leave a Reply
You must be logged in to post a comment.