The first projects for mental health Prop. 1 in California are postponed, canceled

from Marissa KendallCalMatters

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None of the projects expected in 2025 under Gov. Gavin Newsom’s mental health ballot measure are open, CalMatters found, even though the governor says the bond is exceeding its goals.

Newsom promised thousands of mental health treatment beds would come out of Proposition 1, a $6.4 billion bond to California voters passed by a narrow margin in 2024. But projects in the initial round have been delayed, in some cases pushing back opening dates by two years or being canceled.

the state awarded nearly half of the bond money last spring, setting off what Newsom described as the fastest bond fund distribution in California history. When it released that money, the state said it expected 10 of the first 124 projects to be completed by the end of last year.

That didn’t happen. CalMatters confirmed that nine of those projects have been delayed, with new completion dates ranging from this summer to the summer of 2028. One project was canceled.

The bond is a cornerstone of Newsom’s broader plan to help Californians living on the streets with mental illness and should provide some of the resources needed for the governor other mental health programs to succeed. Not including the new inpatient beds, outpatient spaces and housing promised under the Proposition 1 programs such as CARE Courtthat uses the courts to get more people into treatment will not be as effective.

Delays in construction of Prop. projects. 1 highlight the difficulty of rapidly expanding treatment options to meet the demand for mental health care in California, as well as the challenges of building something in the state’s expensive and highly competitive real estate market.

They also mean some of the state’s most vulnerable residents will have to wait longer for help.

The administration tried to fast-track Prop. projects. 1, smoothing out some permitting and other hurdles, Newsom said during a news conference Wednesday. But he admitted there have been obstacles.

“Part of that was driven by, frankly, tariffs, supply chain issues,” he said. “So there was some slippage in some of the projects. We’re deeply mindful and aware of that, but we’re just managing that on a day-to-day basis.”

Newsom this week awarded the remaining $1.18 billion from Ex. 1 for new treatment beds and outpatient places. Overall, the bond has funded 177 projects that should create 6,919 inpatient treatment beds (119 more than originally promised) and 27,561 outpatient treatment beds (861 more than promised).

“That’s a point that needs to be made: exceeding the target in record time,” Newsom said.

But these projects, although already funded, have not yet been implemented.

Assemblyman Jackie Irwinwho introduced the bond proposal in the Legislature, commended the state for quickly disbursing the funds, but said the projects should be open as soon as possible.

“While Prop. 1 allows these projects to move from concept to blueprints, they are not immune to the supply chain challenges or competition for skilled labor that hinders construction of all types in our state,” Irwin, D-Thousand Oaks, wrote in an email to CalMatters. “However, this does not diminish the fact that the Legislature, the Executive and the public must demand that these facilities be opened as quickly as possible.”

Delays across the country

Delays occurred across the state, from Los Angeles to Marin County, for a variety of reasons. In Hollister, a building that was to be purchased with the money from Prop. 1, was unexpectedly sold to someone else and the recipient had to struggle to find a new property. Now another project in Los Angeles is expected to be delayed by at least two years after the beneficiary discovered the building needed seismic retrofitting.

The state’s Department of Health stressed that it was “expected and common” to delay completion dates for major projects. The state checks in on beneficiaries regularly to monitor progress, but doesn’t penalize them just for delay. Instead, if a project falls behind, the state helps resolve construction issues and adjusts its timelines if necessary.

“While the majority of construction remains on schedule, the schedule for some individual projects has shifted slightly due to permitting, site conditions and construction pressures, including supply chain pressure from President Trump’s tariffs,” the department wrote in an email to CalMatters. “These projects are moving forward and will provide long-term treatment capacity for generations.”

In Placer County, the nonprofit Koinonia Family Services received nearly $2 million to create eight beds that would provide short-term residential care for foster youth. But the nonprofit ultimately declined the grant and canceled the project. Koinonia said this was due to “changes in state and federal policy” that raised concerns about the project’s long-term sustainability. The nonprofit did not respond to emails requesting more details.

Other projects ran into administrative hurdles.

In Costa Mesa in Orange County, the nonprofit Encompass Housing won $31 million to create 50 beds where new mothers who need mental health and substance use treatment can stay with their babies. The project originally had an estimated completion date of winter 2025. Last month, Encompass CEO Debbie Wolford said the organization had not even purchased the property yet because of “some delays” with the bond. She did not respond to follow-up emails requesting more details.

Despite the delays, most projects are being implemented.

In Hollister, the nonprofit Youth Recovery Connections had to struggle when it lost its first attempt to purchase a building. The flip set the project back by about a year and a half, but it came with a silver lining. The new building the nonprofit intends to purchase is larger — with double the office space where patients can be seen — and actually costs a little less, according to Youth Recovery Connections executive director Michael Salinas.

In San Rafael, the Ritter Center won $10.5 million to open 1,370 treatment spaces. The nonprofit now provides mental health care and other support to more than 2,500 homeless and precariously housed clients annually. But his current digs — which Ritter has rented for the past 45 years — are getting too old and cramped, and it’s starting to show. The center’s “patient navigators,” who greet incoming patients and tell them where to go, sit in folding chairs under a tent outside the building because there is no room for them inside.

The Ritter Center bought a new building and used the money from Prop. 1 to renovate it and turn it into a state-of-the-art healthcare facility. It will double the number of exam rooms, double the capacity of its food pantry and move its patient navigators indoors.

The project is slated to open this summer, about six months later than originally estimated.

“When people go to a low-income clinic or a place to get social services and it’s run down, it doesn’t reflect the larger community, it says something about what you deserve or what the community’s values ​​are,” said Cynthia Le Monds, the Ritter Center’s chief development officer. “So by having this worthy facility, we’re really making sure we’re giving our patients and customers the best service they can get.”

Bond creates a financial puzzle for counties

In addition to expanding treatment capacity, Prop. 1 also funds permanent housing for people with mental illness and substance use disorders through the Governor’s Homekey+ program. so far the state has awarded $768 million to create 2,260 homes, including 545 reserved for veterans. The first of these projects should be completed this summer.

In addition, the ballot measure displaces other mental health funding priorities. It requires counties to fund housing instead of other services with a share of the revenue they receive from the so-called millionaire’s tax on high-income people for mental health care. That will require some financial gymnastics from counties, which are in the process of pulling funds from existing programs that are no longer a priority — such as suicide prevention, mental health hotlines, anti-stigma campaigns and others — and directing the money to housing.

San Diego County has already identified 29 programs to close.

The original idea was for counties to fill the gaps with Medi-Cal funds, said Michelle Cabrera, executive director of the Association of County Behavioral Health Directors. But with recent federal cuts for Medicaid, that’s no longer as possible, she said.

“There are challenging times ahead,” Cabrera said, “certainly some programs will have to be cut back or cut entirely.”

This story was reported with support from the Rosalynn Carter Fellowship for Mental Health Journalism.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.