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Urban, Coastal Areas Drove Passage Of California’s
Landmark Tax To Support Mental Health Services

Health Affairs Authors Say Policymakers Nationwide Should Watch
As California Experiments With New Funding Resource

BETHESDA, MD — Support from city dwellers, Democrats, social workers, and residents of areas with high homeless rates propelled passage of a landmark California law funding mental health with a tax on people making more than $1 million a year, according to an analysis of election results published today on the Health Affairs Web site.

Counties that voted in support of the ballot measure known as Proposition 63, which imposed a 1 percent income tax on adjusted gross income above $1 million a year, were more likely to have a higher percentage of registered Democrats, a higher number of registered social workers per capita, and a higher rate of homelessness than those that did not vote in favor of the proposition, according to the analysis by Richard Scheffler, a professor at the University of California, Berkeley, and Neal Adams, special projects director at the California Institute of Mental Health.

Publication of the analysis was supported by the Nicholas C. Petris Center at Berkeley, which has received funding from the California HealthCare Foundation to undertake a three-year study to monitor and report on the implementation of Proposition 63. CHCF also supported publication of the article on the Health Affairs Web site.

Although Proposition 63 did not win a majority in seven of the state’s twelve urban areas with populations of 750,000 or more, it failed by a small margin in those areas. Those areas contributed 30.4 percent of the total statewide “yes” votes, however. The urban areas that voted in favor of Proposition 63 were more convincing, with 74.4 percent of San Franciscans and 58.2 percent of Los Angelenos voting in favor.

All but three of the state’s coastal counties voted in favor of Proposition 63, and all but three of the state’s central and eastern counties voted against it.

The authors found no correlation between a county’s median income and a “yes” vote on Proposition 63, although earlier analyses found that 49 percent of those earning more than $80,000 a year voted in favor of Proposition 63, while 63 percent earning less did so.

Understanding why Proposition 63 passed and its effects on the delivery of mental health services will be important for policymakers nationwide, the authors say.

“Proposition 63 has potentially important implications not only for California but for other states as well,” Scheffler says. “Some have begun to debate whether this is good social policy; does it set the stage for other special-needs advocates to propose categorical taxes to support their programs and services, and does it relieve the legislature of responsibility for establishing priorities in policy and spending?

“Perhaps more important is whether new money can make a difference in the quality and effectiveness of public mental health systems,” Adams says. “Other states would be wise to observe the implementation challenges and impacts of this bold experiment before rushing to the ballot box.”

You can read the article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.212.

Health Affairs , published by Project HOPE, is the leading journal of health policy. Peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org. The full text of this Health Affairs Web Exclusive is available free of charge to all Web site visitors for a two-week period following posting, after which it will revert to pay-per-view for nonsubscribers. The abstracts of all articles are free in perpetuity. Support for the publication of this Web Exclusive was provided by the California HealthCare Foundation; Web Exclusives are also supported in part by a grant from the Commonwealth Fund.

©2005 Project HOPE–The People-to-People Health Foundation, Inc.