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LAO and DHCS spar over equitable reach of $4.4 billion Proposition 1 bond as DHCS readies awards
Summary
The Legislative Analyst's Office told the Assembly committee that the Behavioral Health Continuum Infrastructure Program (BCHIP) awards so far have not aligned with geographic need; DHCS said it will use lessons learned and expects to announce major bond awards in May after reviewing nearly $8 billion in requests for $3.3 billion available.
The Legislative Analyst’s Office told the Assembly Budget Subcommittee No. 1 on Health that prior Behavioral Health Continuum Infrastructure Program (BCHIP) awards and the administration’s regional allocation approach have not always aligned with the areas identified as having the greatest need. Department of Health Care Services officials said they are incorporating lessons learned and will begin announcing bond awards this spring.
LAO senior analyst Mark Newton summarized an assessment commissioned to inform the implementation of the Proposition 1 bond, which authorizes a $6.4 billion bond of which $4.4 billion is allocated to behavioral health treatment facilities and infrastructure. "Most of the new capacity that has been added by BCHIP funding to date has been in the four regions that were estimated by the RAND study to actually have the least need," Newton said, adding that no new capacity had been added in the Southern San Joaquin Valley — the region the RAND analysis flagged as the most in need.
DHCS Chief of Community Services Marlise Perez told the committee that DHCS has received nearly $8 billion in applications against $3.3 billion the department planned to award in the first tranche of the bond and that staff are in the process of making award decisions. "It's really exciting time. We have received close to $8,000,000,000 worth of applications, almost 300 applications," Perez said, and added the department expects to announce awards in May.
LAO recommendations and DHCS response: the LAO recommended the legislature seek more detailed reporting on which populations — children and youth, American Indian and Alaska Native populations, and justice‑involved individuals — are served by BCHIP awards. LAO also urged reconsidering an allocation method based on historical regional shares, arguing it can perpetuate previous inequities. DHCS said it has used discretionary funding and planning grants to reach rural counties and has created technical assistance to help smaller counties prepare applications.
Why it matters: BCHIP bond awards fund construction or renovation of behavioral health treatment facilities, an important lever to increase capacity for inpatient, residential and community care. The LAO emphasized data gaps for some facility types and urged the administration to address barriers for smaller or disadvantaged applicants.
Ending: The committee members pressed for greater transparency on how awards are prioritized and asked DHCS to provide more detail about application review and post‑award monitoring; DHCS said it vets licensing, complaints and exclusion lists prior to awards and will apply lessons from prior rounds to the larger bond awards.
