California has significantly transformed its approach to mental health funding over the past five years. From foundational programs in 2020-21 to new initiatives and reforms in 2024-25, the state has ramped up investments to address the growing mental health crisis, focusing on infrastructure, housing, and youth services. As 2024 comes to a close, this evolution reflects both progress and persistent challenges in meeting the needs of vulnerable populations.

Major Shifts in Mental Health Funding

In 2020-21, the Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) initiative received $7.7 billion to provide equitable care for behavioral health needs. This funding included $351.5 million from the General Fund and $4.6 billion in federal contributions, as outlined in the 2020-21 fiscal budget from the California Department of Finance (DOF). These investments demonstrated the state’s commitment to strengthening county-level behavioral health systems.

By 2024-25, BH-CONNECT’s funding has remained consistent, but additional measures were introduced, such as the Behavioral Health Bridge Housing program, which added $1.25 billion to provide housing for individuals with mental health challenges, particularly those at risk of homelessness. Similarly, the Bond Behavioral Health Continuum Infrastructure Program (BHCIP), detailed in the 2024-25 budget, allocated $1.75 billion to expand treatment beds, outpatient capacity, and housing options.

The Behavioral Health Infrastructure Bond Act (Proposition 1) further amplified these efforts by allocating $6.38 billion in bonds to strengthen behavioral health resources across the state. These resources include permanent supportive housing initiatives for veterans and underserved populations.

Youth Mental Health Takes Center Stage

Another major evolution is the introduction of the Children and Youth Behavioral Health Initiative (CYBHI), which emerged after 2020-21. This initiative focuses on early intervention and school-linked behavioral health services. By 2024-25, the program has allocated $4.1 billion across departments, though recent budget reductions have cut $313.9 million from its General Fund support.

One of the initiative's key programs includes funding for wellness coaches in schools, a new Medi-Cal benefit set to increase to $78 million annually by 2027-28. These coaches provide critical behavioral health support for children and youth in school-linked settings, according to the 2024-25 budget from the California Department of Finance.

Additionally, this initiative emphasizes community-defined practices and evidence-based grants, ensuring that culturally responsive care is integrated into behavioral health programs statewide.

Proposition 1 Brings Structural Reform

March 2024 marked the passage of Proposition 1, a game-changing measure for California’s mental health landscape. This reform restructured the Mental Health Services Act (MHSA), renaming it the Behavioral Health Services Act (SB 326). The initiative prioritized funding for individuals with severe mental illnesses and substance use disorders while supporting housing development and workforce expansion.

The 2024-25 budget details that Proposition 1 funding includes $6.4 billion for building treatment beds, expanding outpatient care, and creating permanent supportive housing units. These resources aim to provide scalable solutions to address gaps in behavioral health infrastructure, particularly for underserved groups such as veterans.

Challenges and Future Directions

Despite increased funding, challenges remain. The 2023-24 budget saw a $30 million reversion from CalWORKs mental health services, while declining revenues for Proposition 56 resulted in a $193.4 million reduction in supplemental payments for physician services in 2024-25. These reductions reflect the fiscal constraints detailed in the 2023-24 fiscal budget.

In addition, the 2024-25 budget highlights delays in implementing the California Food Assistance Program (CFAP) expansion for adults aged 55 and older, now postponed to October 2027. These delays signal ongoing struggles in managing competing fiscal priorities.

However, innovative initiatives such as the Behavioral Health Continuum Infrastructure Program and wellness coaches in schools showcase California’s strong commitment to long-term mental health reform. With $7.7 billion annually for BH-CONNECT and significant investments across infrastructure and youth initiatives, the state continues to lead in addressing the nation’s mental health challenges.

Looking Ahead to 2025

As 2025 approaches, California’s mental health priorities will center on implementing the initiatives outlined in recent budgets. The Behavioral Health Bridge Housing and Children and Youth Behavioral Health Initiative (CYBHI) programs will expand, with wellness coaches in schools and additional housing solutions coming into focus. The full rollout of Proposition 1 reforms will further reshape the state’s approach, emphasizing infrastructure and care for individuals with severe mental illnesses and substance use disorders.

The 2024-25 fiscal budget also emphasizes workforce development, with $40 million allocated for Medi-Cal provider training and retention efforts in 2026-27. These resources aim to sustain the momentum of reforms and deliver measurable improvements in behavioral health care and housing solutions.