Governor Newsom & Legislative Partners Unveil Transformation of California’s Mental Health Services Act

Housing with Accountability. Reform with Results.

WHAT YOU NEED TO KNOW: Governor Newsom and Legislative leaders are proposing a $4.68 billion bond and modernization of the Mental Health Services Act (MHSA) for the March 2024 ballot, which together would provide California the resources needed to build 10,000 new beds across community treatment campuses and facilities to help Californians with serious mental illness and substance use disorders get the housing and care they need.

SACRAMENTO – Governor Gavin Newsom, in partnership with Senator Susan Talamantes Eggman (D-Stockton) and Assemblymember Jacqui Irwin (D-Thousand Oaks), today announced a legislative package reflecting the Governor’s historic Mental Health Services Act (MHSA) transformation and new bond unveiled earlier this year in San Diego as part of his Tour of the State of California. This transformation will focus on housing with accountability and reform with results to help ensure Californians can access critical behavioral health services, including housing and treatment for substance use disorders – making good on a decades-old promise by state leaders.

WHAT GOVERNOR NEWSOM SAID: “We are facing a confluence of crises: mental health, opioids, housing, and homelessness – and this transformative effort will ensure California is tackling these head-on in a comprehensive and inclusive way. Over the last few years, California has led the nation in expanding access to affordable and quality mental health services – especially for children, teens, and people with untreated mental illness. The historic legislative effort announced today will supercharge these efforts to ensure California continues to lead the way in the decades to come.”

The two bills: SB 326 (Eggman) & AB 531 (Irwin) focus on five solutions to transform California’s behavioral health system through housing with accountability and reform with results:

  1. Reforming key behavioral health care funding to provide services to the most seriously ill and to treat substance use disorders
  2. Building a workforce to reflect and connect with California’s diversity
  3. Focusing on outcomes, accountability, and equity
  4. Housing and behavioral health treatment in unlocked, community-based settings
  5. Housing for veterans with behavioral health challenges

Combined, this legislative package will bring this transformation to all communities, all ages, all incomes, and cover mental health and substance use disorders as well as build out the State’s capacity to provide behavioral health care, housing, and good jobs for Californians – with strengthened accountability for results.


These reforms will complement and build upon California’s transformative behavioral health expansion and reform efforts under Governor Newsom’s Administration, including the creation of CARE Court, to provide a continuum of community care for all – from prevention and early intervention to outpatient, crisis, inpatient, and supportive care.

WHAT COMES NEXT: The two bills will work their way through the California Legislature in the coming months. The behavioral health legislative package will go to the voters for approval in March 2024, after consideration and approval by Legislature and Governor Newsom’s signature in 2023.


  • Senator Susan Talamantes Eggman (D-Stockton): “We are facing mental health and substance abuse crises on our streets in communities throughout California. This legislation will help us transform our behavioral health system and provide critically needed support for the most vulnerable among us, many of whom are struggling with homelessness in addition to mental illness. The time to act is now.”
  • Assemblymember Jacqui Irwin (D-Thousand Oaks): “Getting veterans experiencing homelessness off the streets has long been a priority for California, but getting some of our most vulnerable veterans into needed treatment for behavioral health challenges will be transformative. One of the only groups that has seen a recent significant decline in percent of homelessness are veterans, thanks primarily to the very successful Veterans Housing and Homeless Prevention (VHHP) program. Building upon VHHP, AB 531 and SB 326 will provide housing and treatment services to veterans that focus on serious mental illness and substance use disorders. Funding and expanding this program is the right thing to do, and I look forward to working with the Governor and veterans organizations to put these important advances before the voters.”
  • Sacramento Mayor Darrell Steinberg, author of the Mental Health Services Act: “Nearly 20 years ago, I authored proposition 63, California’s Mental Health Services Act. Over two decades, it saved the public mental health system and helped tens of thousands of people. Twenty years ago, mental health was rarely talked about. There was no pandemic, no children’s mental health crisis, and homelessness was not nearly the issue it is today. It’s time to modernize the Mental Health Services Act. Now 58 counties do their best to use the $4 billion annually without any clear state and societal priorities driving their investments. The Newsom administration’s bold modernization proposal will ensure that more money is spent helping and housing unsheltered Californians living with severe mental illness and substance abuse. Is there any issue more important to the people of California and the thousands living in squalor on our streets? It will ensure that early intervention dollars are spent on the most effective strategies, especially helping teenagers get help before they suffer a first psychotic break. We wrote the MHSA to help address the most serious consequences of untreated mental illness. It has done much good but can do so much more. Simply put, more of these precious resources need to be spent on a uniform set of services and strategies that address the immense suffering of people living with mental Illness who are also homeless, in and out of the criminal justice system, and having little or no chance of living full and productive lives. I fully support the changes and hope the Legislature acts quickly to place the measure on the 2024 ballot.”
  • HHS Secretary Dr. Mark Ghaly: “Too many Californians with the most severe behavioral health conditions are living on the streets. Many spend significant time incarcerated. Many cycle in and out of hospitals. At the same time, select counties have demonstrated promising approaches to supporting these most vulnerable Californians – successfully able to meet their clinical, social services and housing needs. Today’s actions provide a clear set of priorities and expectations for outcomes. They provide the kind of focus needed to not only provide better, whole-person focused services, but to ultimately bend the arch of the lives of many Californians toward successful community living and independence.”
  • CalVet Secretary Lindsey Sin: “There is an undeniable connection between behavioral health and stable housing – something many of our veterans struggle with every day. This reform will help us build more housing for our veterans and provide the services and support they need to remain successfully housed.”
  • BCSH Secretary Lourdes Castro Ramirez: “Housing that is deeply affordable and offers robust support services, especially behavioral and health services, shortens the time people experience homelessness and leads to better life outcomes. These measures will expand access to stable housing and essential services, improve lives and build on our collective progress to comprehensively address homelessness.”
  • SEIU Local 721 President David Green: “SEIU members support the Administration’s proposed expansion of critical mental health services. There is no such thing as health without mental health, and access to mental health services has been a gaping hole in our healthcare system. This proposal moves us in the right direction. The inclusion of substance abuse disorder treatment is of particular importance, and the investments in our workforce are also essential.”