Prop 1 shifts county mental‑health funding; Marin staff warn of programming changes and potential shortfall

Marin County Health and Human Services leaders told the Board of Supervisors Monday that changes enacted by Proposition 1 (Behavioral Health Services Act, BHSA) will alter how county behavioral health programs are funded and administered and will require new planning, reporting and program realignment before a July 1, 2026 effective date.

BHSA replaces the Mental Health Services Act (Proposition 63) and makes several substantive changes: it designates 30% of behavioral health funds for housing infrastructure; establishes a multi‑billion dollar statewide bond (roughly $6.4 billion) for behavioral health treatment facilities and permanent supportive housing; transfers prevention and certain workforce education funds to state agencies; expands the populations eligible for services to include people with primary substance use disorders; and centralizes additional data and funding reporting requirements.

Todd Shermer, director of Behavioral Health and Recovery Services, told the board that locally the changes will reduce several categories of locally administered MHSA funding (prevention and certain locally defined programs), add new state requirements and evidence‑based practice mandates, and create operational needs — including new data and billing systems. Shermer said the county faces an estimated funding gap as staff interpret BHSA: after counting state shifts and local reallocations, the department projected a remaining shortfall in the range of $3.5 million under staff assumptions; depending on choices and take‑up of Medi‑Cal opportunities, the overall exposure could be larger (staff discussed figures up to approximately $12 million as an upper bound under certain assumptions).

Shermer outlined an 18‑month transition timetable: community planning and stakeholder meetings are already underway; counties must submit revised three‑year plans and annual updates; the state is beginning to release bond and program guidance in rounds; and implementation is required by July 1, 2026. Marin staff are conducting community meetings in English, Spanish and Vietnamese and have begun surveying stakeholders on priorities, which so far emphasize peer and family support, youth behavioral‑health services, housing and substance‑use treatment across the lifespan.

Shermer and Health and Human Services Director Dr. Lisa Varjoo asked the board for feedback on county priorities and on how the board wishes to receive updates as staff draft a plan for public comment in fall 2025 and seek board approval later in the year. Supervisors asked staff to return with options to address the projected budget gap, to pursue bond and Homekey Plus applications where sites are shovel‑ready and to coordinate with Community Development Agency and cities on housing proposals.

Marin's behavioral health staff also noted that Prop 1 creates a statewide Behavioral Health Continuum Infrastructure Program (B‑CHIP) grant cycle and Homekey Plus rounds; staff supported a number of regional applications and said they are preparing additional submissions. Shermer cautioned that many bond rounds favor "shovel‑ready" projects and that local governments often must identify properties and match operating funds to make projects competitive.