California Proposition 1E, Mental Health Revenue Fund Shift (May 2009)

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California Proposition 1E was on a special statewide May 19, 2009 election ballot in California, appearing as a legislatively-referred state statute, where it was defeated.[1][2][3] It was part of the 2009-2010 California state budget and tax increase agreement.[4][5]

To avoid additional cuts in general fund-supported state spending, Proposition 1E would have authorized a fund-shift of approximately $230 million annually in income tax surcharge revenue currently earmarked for specified mental health programs under the terms of Proposition 63 (2004), also known as the Mental Health Services Act. For two years that revenue would instead have been used to pay for the state's share of the "Early Periodic Screening, Diagnosis and Treatment Program," a federally mandated Medicaid program for low income persons under age 21. Revenue for this program currently comes from the state general fund.[6]

The earmarked Proposition 63 (2004) revenue that would have been diverted comes from a 1% state income tax surcharge imposed on the portion of a taxpayer’s taxable income in excess of $1 million. In the past this surcharge has taken in between $900 million and $1.5 billion annually.

Election results

California Proposition 1E
ResultVotesPercentage
Defeatedd No3,169,16366.4%
Yes 1,597,907 33.5%
Final results from the California Secretary of State

Background

Proposition 1E was one of six statewide ballot propositions placed on the May ballot as part of a part of the 2009-2010 state budget and tax increase agreement. (Propositions 1A, 1B, 1C, 1D, 1E and 1F) were intended to close an approximately $42 billion budget gap. However, the California Legislative Analyst's Office, an agency of the state government, said in early March that tax revenues flowing into the state treasury are "well below" the projections it used earlier in the year, and that California's government now faces an additional $8 billion gap in addition to the earlier $42 billion gap.[7]

Text of measure

Chart developed by the California Legislative Analyst's Office to help voters understand Proposition 1E

Title

The ballot title was:

Mental Health Services Funding. Temporary Allocation. Helps Balance State Budget. Legislative Initiative Amendment.

Summary

The official summary provided to describe Proposition 1E said:

  • Amends Mental Health Services Act (Proposition 63 of 2004) to transfer funds, for a two-year period, from mental health programs under that act to pay for mental health services for children and young adults provided through the Early and Periodic Screening, Diagnosis, and Treatment Program.
  • Provides more than $225 million in flexible funding for mental health programs.
  • Helps balance state budget during this difficult economic time.

Fiscal impact

See also: Fiscal impact statement

The estimate of net state and local government fiscal implications of Proposition 1E provided by the California Legislative Analyst's Office said:

  • State General Fund savings of about $230 million annually for two years (2009–10 and 2010–11) from redirecting a portion of Proposition 63 funds to an existing state program in place of state General Fund support.
  • Corresponding reduction in funding available for Proposition 63 community mental health programs.

Ballot language lawsuit

Rusty Selix and Richard Van Horn filed a lawsuit with Judge Michael P. Kenny in Sacramento Superior Court on March 4, 2009 saying that Proposition 1E's (original) ballot title was "false and misleading" because it "does not clearly state that Proposition 1E would redirect the money the voters earmarked in 2004." The plaintiffs wanted the judge to order the California Secretary of State to re-write the ballot title.[8]

Selix and Van Horn dropped their lawsuit shortly after it was filed, saying they had come to an agreement with the Secretary of State's office to change elements in the ballot title. The agreed-upon new ballot summary says that 1E diverts $230 million annually for two years from certain state programs in order to help balance the budget.[9]

  • The original ballot title was Ensures Funding For Children's Mental Health Services. Helps Balance State Budget.
  • The new ballot title is Mental Health Services Funding. Temporary Reallocation. Helps Balance State Budget.

The ballot summary for Proposition 1E was also changed. The original summary said:

"MENTAL HEALTH FUNDING BUDGET. Helps balance the state budget and preserve funding for children’s mental health services by providing temporary flexibility in the Mental Health Services Act to fund the Early and Periodic Screening, Diagnosis, and Treatment Program for children. Fiscal Impact: State General Fund savings of about $230 million annually for two years (2009-10 and 2010-11). Corresponding reduction in funding available for Mental Health Services Act programs."

The revised summary says:

"MENTAL HEALTH FUNDING. TEMPORARY REALLOCATION. Helps balance state budget by amending the Mental Health Services Act (Proposition 63 of 2004) to transfer funds, for two years, to pay for mental health services provided through the Early and Periodic Screening, Diagnosis and Treatment program for children and young adults. Fiscal impact: State General Fund savings of about $230 million annually for two years (2009-10 and 2010-11). Corresponding reduction in funding available for Mental Health Services Act programs."[10]

Support

Budget Reform Now.JPG
See also: Supporters of California Propositions 1A, 1B, 1C, 1D, 1E or 1F (May 2009)

Supporters

Proposition 1E was supported by "Budget Reform Now," a coalition of groups assembled by then-Governor Arnold Schwarzenegger to support the overall 2009-2010 budget agreement and tax increases.

The official arguments in favor of Proposition 1E in the voter guide were signed by:

On April 26, the California Democratic Party, meeting in its annual convention, rejected a recommendation from their party's legislative leaders to support Proposition 1E and instead adopted a position of neutrality on the measure.[12]

Arguments in favor

Arguments made in favor of Proposition 1E in the official voter guide were written by Darrell Steinberg, a co-author of Proposition 63, the 2004 "Income Tax Increase for Mental Health Services", which Proposition 1E aimed to change. Steinberg made these arguments:

  • "As the co-author of Proposition 63, I support diverting funds from the Mental Health Services Act only as a last resort to help balance the state budget this year. California faces an unprecedented $42 billion budget deficit. Solving a budget crisis of this magnitude has been painful and difficult. Everyone has had to give something. But as a collective we must all share in the sacrifice to help put California back on track."
  • "Proposition 1E will save the state's General Fund over $225 million in 2009–10 and up to $234 million in 2010–11 by redirecting funds from the Mental Health Services Act account to the state's Early and Periodic, Screening, Diagnosis and Treatment (EPSDT) program for the next two years. Children served under the EPSDT program will continue to receive specialized care for their complex mental health needs."
  • "This is a one-time redirection of funds at a time when we face an economic crisis like we have never seen before. This should not be a precedent for diverting Proposition 63 funds in the future. We need every dollar to end the neglect of people living with mental illness."[11]

Donors

$22,503,109 was reported contributed to the campaign in favor of a "yes" vote on Proposition 1E, with an additional $1,730 of reported independent expenditures in support. Several of the most well-funded campaign committees advocating for a "yes" vote on Proposition 1E were simultaneously advocating for a "yes" vote on Propositions 1A, 1B, 1C, 1D and 1F. Because of this, it isn't possible to determine how much money was raised or spent just on Proposition 1E's behalf.[13]

Opposition

Opponents


Campaign ad opposing Prop 1E

Some groups representing individuals who benefit from state mental health spending opposed Proposition 1E, because it would allow the diversion of money from their preferred government spending to other spending areas. These groups included:

The official arguments opposing Proposition 1E in the voter guide were signed by:

Arguments against 1E

Arguments that were for a "no" vote on Prop 1E included:

  • According to Rusty Selix, the Executive Director of the Mental Health Association in California, "If Prop 1E is passed, people with mental illness will lose the care they so desperately need, and will cost taxpayers more in hospitalizations, homelessness and criminal justice."[15]
  • "Five years ago, California voters made the decision to invest in our public mental health system. Through the Mental Health Services Act, Proposition 63, Californians were clear in their commitment to expand community mental health services. Following forty years of neglecting the mentally ill, in 2004 voters turned a new page and passed Proposition 63 and thereby began to rebuild California's public mental health system. Even in this difficult time, we ought to respect the will of the people."[11]
  • "We shouldn't take money from the Mental Health Services Act that was approved by the voters. These programs are helping hundreds of thousands of people living with mental illness in our community. To take away the funding would put this progress at risk. We can end the tragedies of kids failing in school, prevent homelessness, and change lives for the better. Let's keep Proposition 63 funding in place, for our children and for our future."[11]

Donors

$1,054,291 was contributed to the campaign in favor of a "no" vote on Proposition 1E, with an additional $1,197 of reported independent expenditures in support. Since several of the campaign committees advocating for a "no" vote on Proposition 1E were simultaneously advocating for a "no" vote on Proposition 1D, it isn't possible to determine how much money was raised or spent just to oppose Proposition 1E.[13]

Opponents criticize ads

Dave Fratello, the campaign manager for the "NO on Prop 1D and 1E" campaign, objected to the television ads that Budget Reform Now ran to urge a "yes" vote on 1D and 1E. He said, "These statements aren't true. Proposition 1D & 1E take money out of voter-approved mental health and children's programs, then put that money into the state general fund. These measures then allow the Legislature and the Governor to spend that money with none of the accountability required by the original, voter-approved initiatives. Furthermore, the money taken won't be repaid."[16]

Polls

See also Public opinion polling for all May 2009 statewide ballot propositions

The Field Poll conducted a public opinion research survey between February 20 and March 1 on Proposition 1E and the other five budget-related measures that were on the May 19 ballot.[17][18]

  • On April 20-21, SurveyUSA conducted a poll of 1,300 California adults for KABC-TV Los Angeles, KPIX-TV San Francisco, KGTV-TV San Diego, and KFSN-TV Fresno. 15% of the registered voters they spoke with had already cast their vote. They concluded that for Proposition 1E, opposition had increased over the last six-week period.[21]
Date of Poll Pollster In favor Opposed Undecided
February 20-March 1 Field 57 percent 23 percent 20 percent
March 10-17 PPIC 47 percent 37 percent 16 percent
March 11-12 SurveyUSA 36 percent 30 percent 34 percent
April 16-26 Field 40 percent 51 percent 9 percent
April 20-21 SurveyUSA 32 percent 41 percent 27 percent
April 27 - May 4 PPIC 41 percent 48 percent 11 percent
May 8-10 SurveyUSA 35 percent 51 percent 14 percent
May 15-17 SurveyUSA 33 percent 55 percent 11 percent

Editorial opinion

"Yes on 1E"

Newspapers endorsing a "yes" vote on Proposition 1E included:

  • The Los Angeles Times, which wrote, "...we cannot be as cheerful as the campaign ads that began running last week...but the good outweighs the bad... It's a shame to see money taken from successful programs. But it's temporary -- in this case, only two years -- and it's needed."[22]

"No on 1E"

Newspapers endorsing a "no" vote on Proposition 1E included:

  • The San Francisco Bay Guardian.[23]

Path to the ballot

The California State Legislature voted to put Proposition 1E on the ballot via Senate Bill 10 of the 2009–2010 Third Extraordinary Session (Chapter 15, 2009–2010 Third Extraordinary Session).

Votes in legislature to refer to SB 10 to ballot
Chamber Ayes Noes
Assembly 76 4
Senate 36 2

External links

BP-Initials-UPDATED.png
Suggest a link

Basic background information:

Supporters:

Opponents:

Additional reading:

References

  1. Sacramento Bee, "Angry voters whack budget, politicians," May 20, 2009
  2. Los Angeles Times, "With budget stalemate over, next move is up to California voters," February 20, 2009
  3. Los Angeles Times, "May 19 election deadlines already drawing near," February 20, 2009
  4. Los Angeles Times, "With budget stalemate over, next move is up to California voters," February 20, 2009
  5. Los Angeles Times, "May 19 election deadlines already drawing near," February 20, 2009
  6. San Francisco Chronicle, "Budget-related measures on the May 19 ballot," February 20, 2009
  7. San Diego Union-Tribune, "State budget springs a leak," March 14, 2009
  8. Sacramento Bee, "Lawsuit challenges Proposition 1E ballot label," March 4, 2009
  9. Sacramento Bee, "Mental health advocates drop challenge to ballot summary," March 5, 2009 (dead link)
  10. KQED Capitol Notes, "Prop 1E gets new title and summary," March 5, 2009
  11. 11.0 11.1 11.2 11.3 Voter Guide, "Arguments for and against Proposition 1E"
  12. Los Angeles Times, "State Democrats decline to endorse 3 of 6 ballot measures," April 27, 2009
  13. 13.0 13.1 Follow the Money, Proposition 1E
  14. Mercury News, "Support, opposition for May ballot propositions," March 25, 2009 (dead link)
  15. California Progress Report, "Props 1D and 1E – Wolves in Sheep’s Clothing," May 1, 2009 (dead link)
  16. Yuba Net, "YES Campaign TV Ad Misleading on Proposition 1D and 1E," April 25, 2009
  17. Sacramento Bee, "Field Poll shows early backing for budget items on ballot," March 4, 2009
  18. Field Poll results for initial polling on six budget measures on May 19 ballot
  19. Sacramento Bee, "Budget ballot measures face uphill fight," March 26, 2009
  20. Public Policy Institute of California, "Special Election Ballot Propositions Face Tough Road," March 25, 2009
  21. SurveyUSA, "One Month From California Special Election, Opposition Grows to 5 of 6 Ballot Measures," April 22, 2009
  22. Los Angeles Times, "Yes on 1A, 1C, 1D, 1E and 1F," April 26, 2009
  23. Institute of Governmental Studies, "Endorsements, May 19, 2009 ballot propositions" (dead link)