BILL ANALYSIS
SB 1392
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SENATE THIRD READING
SB 1392 (Steinberg)
As Amended August 18, 2010
Majority vote
SENATE VOTE :33-0
HEALTH 18-0 APPROPRIATIONS 12-5
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|Ayes:|Monning, Fletcher, |Ayes:|Fuentes, Bradford, |
| |Ammiano, Carter, Conway, | |Huffman, Coto, Davis, De |
| |De La Torre, De Leon, | |Leon, Gatto, Hall, |
| |Eng, Gaines, Hayashi, | |Skinner, Solorio, |
| |Hernandez, Jones, Bonnie | |Torlakson, Torrico |
| |Lowenthal, Nava, Salas, | | |
| |Smyth, Audra Strickland, | | |
| |Silva | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Norby |
| | | | |
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SUMMARY : Expedites the disbursement of various sources of
mental health funds from the Department of Mental Health (DMH)
to counties. Specifically, this bill :
1)Deletes a provision in existing law requiring DMH to
distribute a maximum of 95% of total state General Fund (GF)
realignment allocations to counties each fiscal year upon
passage of the annual Budget Act.
2)Makes conforming changes to existing law governing Medi-Cal
specialty mental health services to mirror the requirement in
this bill to delete DMH's 5% withholding authority pursuant to
1) above.
3)Requires DMH to distribute in a single lump sum the total
approved funding to each county for the provision of programs
and other activities related to the Mental Health Services Act
(MHSA), subject to the availability of funding as determined
by the Department of Finance.
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4)Clarifies that MHSA funding distributions must be based on the
amount specified in each county's three-year funding plan or
update, as required by existing law, and specifies that the
provisions of this bill in no way change the authority to
approve, deny, or request further information regarding a
county's three-year plan or update.
5)Makes various legislative findings and declarations including
that this bill is needed to facilitate the efficiency and cost
effectiveness of community mental health services and prevent
avoidable future county budget cuts to mental health.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, establishing a lump sum distribution of MHSA funding
will result in the earlier release of $275 million (100% MHSA
special funds) from a total annual allocation of $1.1 billion,
and ending the 5% withhold of Mental Health Managed Care Funds
will result in the earlier release of approximately $5 million
each year.
COMMENTS : The author states that this bill removes unnecessary
mental health funding delays at the state level to enable
counties to appropriately access funding in a timely manner and
prevent avoidable budget cuts. The author maintains that, too
often, people with serious mental illnesses are showing up in
emergency rooms with acute mental health needs instead of at
mental health programs that provide earlier and more appropriate
care. The author points to numerous audits that, most recently
by the federal Centers for Medicaid and Medicare Services in
2008 and 2010, have unearthed state inefficiencies in the
administration of mental health dollars to the counties.
According to the author, this bill is intended to hold state
departments accountable for these inefficiencies while
streamlining the processes by which the state reimburses and
distributes funds for community mental health services to
provide counties with cash flow relief.
The complex formula through which the state allocates GF
revenues to counties is prescribed in statute. Once the State
Budget is passed, DMH distributes to counties their GF
appropriation. As mandated by current law, the lump sum
distributions to each county equate to 95% of the appropriation.
DMH distributes the remaining 5% in lump sum payments to the
counties at the beginning of the following fiscal year. DMH
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reports that, usually, in any one fiscal year, counties receive
the 5% allocation withheld from the prior fiscal year and the
95% allocation of the current fiscal year. Counties may
"roll-over" to the subsequent fiscal year GF distributions
received but not spent. Currently, DMH indicates that counties
are reporting that $12.8 million in distributions available in
fiscal year (FY) 2008-09 will not be spent and are being rolled
over into FY 2009-10.
The MHSA, or Proposition 63, imposes a 1% state income surtax on
incomes exceeding $1 million and requires each county to prepare
and submit a three-year plan to DMH that must be updated
annually and approved by DMH after review and comment by the
Mental Health Services Oversight and Accountability Commission.
In their three-year plans, counties are required to submit a
listing of all work plans for which MHSA funding is being
requested that identifies how the funds will be spent and which
populations will be served. According to DMH, based on terms of
current contracts between DMH and the counties, 75% of counties'
current year allocations of MHSA funding is disbursed upon
approval of plans submitted by the counties. The additional 25%
is held until counties submit required revenue and expenditure
reports describing how the money has been spent in accordance
with the MHSA and county plans. DMH notes that the 75/25 split
only applies to plans submitted and approved in any current
fiscal year.
This bill changes the 75/25 formula to require counties to
receive a lump sum distribution of their MHSA allocation
upfront. DMH states that withholding the 25% is intended as an
incentive to counties that file the required reports in a timely
manner and, without these reports, DMH would not be able to
fulfill its program implementation and oversight
responsibilities that are required by the MHSA. Counties point
out that the timeliness of county MHSA report submissions
depends largely on DMH providing forms to counties that are
accurate and free of errors.
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097
FN: 0006017
SB 1392
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