California says second-round Prop 1 awards push state past bond goals, funds 66 new projects

Governor Newsom announced the second and final round of state awards under Proposition 1 on Tuesday, saying the $1.18 billion distribution will fund 66 projects and roughly 130 facilities across California and push the program past its original targets for treatment capacity.

The governor said the second round will create 2,554 residential treatment beds and 4,273 outpatient treatment slots, and that combining rounds 1 and 2 puts the state at about 6,919 residential beds and 27,561 outpatient slots. “This is the fastest distribution of funds for a state bond in history,” he said, framing the awards as part of a broader effort to rebuild community-based behavioral-health capacity.

Why it matters: the awards aim to expand treatment options in areas that have lacked infrastructure for decades and to speed up openings through land-use and CEQA reforms modeled on the state’s Homekey approach. The governor said the rounds prioritize first-time awardees and rural communities and that the state will pair those capital investments with a funding stream redirected from the Mental Health Services Act starting July 1 to support long-term operations and housing-related services.

Officials’ account: the director of the California Department of Health Care Services said the combined Bond B CHIP awards will deliver capacity beyond the original Prop 1 goals. The director stated, “With today's awards, California surpasses Proposition 1 goals for expanding treatment beds and outpatient capacity,” and described new program types funded in this round, from tribal peer respite and youth peer respite to expanded perinatal residential care.

Local examples and partners: nonprofit and county partners described how awards will work on the ground. Doug Bond, president and CEO of the Amity Foundation, said the proposed Ontario campus will be a model for “smart public health and public safety” in the Inland Empire, and Genevieve Valentine, San Joaquin County’s health care services director, described her county’s integrated behavioral health campus that combines a round-1 B CHIP award with settlement and county funds to add beds and services.

Accountability and implementation: the governor emphasized oversight and speed-to-delivery — noting an administration accountability dashboard (accountability.ca.gov) — and said contracts for second-round projects will move forward once financing and licensing align. He acknowledged supply-chain and tariff-related delays that have affected some projects and said the state has tightened vetting and used a stress-test approach; he recalled $300 million pulled from round 1 after screening and said that a stricter review process is in place for current awardees.

Q&A highlights: reporters pressed officials on program risks and broader issues. The governor confirmed the administration shares intelligence about potential threats (such as reported drone concerns) with local partners through the State Operations Center and said the state is preparing for worst-case scenarios when necessary. On Homekey, officials defended the program’s overall success while acknowledging projects that experienced delays or fraud, and described enhanced vetting, technical assistance and tighter accountability to reduce those risks.

What’s next: officials said many projects are already operational and others have completion timelines over the next few years. The administration expects second-round contracts to be finalized within about 90 days once financing and licensing are confirmed and will continue to emphasize local delivery, transparency and program monitoring as construction and services roll out.

Sources: remarks by Governor Newsom; remarks by the director of the California Department of Health Care Services; testimony from Doug Bond (Amity Foundation) and Genevieve Valentine (San Joaquin County Health Care Services director).