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Sonoma County staff warn Prop 1 conversion will shrink behavioral health flexibility, force $9 million shift
Summary
County Health Services staff told the Board that California's Prop 1 (BHSA) converts the Mental Health Services Act into a more prescriptive Behavioral Health Services Act, adds housing and substance-use requirements, and will require local budget and contract changes that staff estimate could affect about $9 million in current programs.
County health officials presented to the Sonoma County Board of Supervisors on Sept. 16 a high-level plan for implementing Proposition 1'the conversion of the Mental Health Services Act (MHSA) into the Behavioral Health Services Act (BHSA)'and warned it will tighten how counties may spend the same pot of money.
Nolan Sullivan, Department of Health Services director, said the statewide conversion takes effect July 1, 2026, and "does not add new dollars; in fact, we get less dollars" once the state reallocates portions for workforce and prevention. Sullivan said staff have identified about $9,000,000 in funds that will no longer be available to support some programs previously paid for under MHSA, and estimated the county's FY 2026'7 BHSA allocation at roughly $33,000,000.
Why it matters: Under BHSA, counties must dedicate a new housing allocation (30% of BHSA funds) and explicitly include substance-use care in the funding pool. Sullivan told the board this creates "layers of restrictions on restrictions" that will reduce flexibility for prevention and early-intervention programs that previously made up a significant portion of MHSA spending.
Behavioral health director Jan Koboletta Keebler and planner Melissa Ladrick described the programmatic consequences in more detail. Ladrick said BHSA is "very prescriptive" about allowable uses, evidence-based practice standards and staffing ratios; she said some program categories (for example, the existing innovation funding) no longer exist in the new structure. Koboletta explained the distribution rules staff are using in drafting a local integrated plan: 35% of funds for full-service partnerships (FSPs), 35% for behavioral health services and supports (of which 51% must go to early intervention, and 51% of that early-intervention amount must be spent on people 25 years of age or younger), and 30% for housing.
Board members pressed staff on operational impacts. Supervisor Coursey asked whether contract language and reporting requirements will change; Ladrick said counties must adopt new RFP templates and reporting templates (called Behavioral Health Outcome and Transparency Reports). Sullivan said county accounting and contracting systems are already strained and described planning delays caused by disparate spreadsheets and manual processes: "there are Excel spreadsheets on Excel spreadsheets on Excel spreadsheets," he said, and asked for state or regional tools to help counties braid funding and reporting.
Staff said they have notified approximately 20 providers who may be at risk of losing BHSA-eligible funding and are continuing outreach. Sullivan said the county will look for alternate funding sources (Measure O, realignment, grant funds) to backfill some services but cautioned that Measure O itself is set to expire near the end of the next three-year planning cycle, which presents a separate budget risk.
Timeline and next steps: Staff outlined a planning schedule that begins with the Behavioral Health Board review of an updated draft on Oct. 21, 2025; a final integrated draft for CEO attestation in December 2025; submission to the Department of Health Care Services and a state review early in 2026; a 30-day public posting and a public hearing in spring 2026; and Board review and possible approval in May 2026, with a target BHSA go-live date of July 1, 2026.
What the presenters asked of the board: continue stakeholder engagement, support contingency planning for Measure O expiration, and allow staff time to develop RFPs and contract templates under the new BHSA rules. Sullivan said staff will return with a more complete list of impacted contracts once the cascading allocation formulas are finalized.
Public comment during the item included appreciation for the presentation and requests that the county post clearer timelines and outreach materials for affected providers and community members.
The item was informational only and no action was requested or taken at the Sept. 16 meeting.
