Report says California fails to track $13B in mental health spending from millionaire's tax

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SACRAMENTO, California — State and county officials cannot show how billions of dollars collected through a voter-approved tax on millionaires are being spent or whether the related programs have helped people with mental illness as voters intended, a state watchdog commission reported Tuesday.

The Little Hoover Commission report is the latest review to find that the state has little evidence to show that $13 billion in Proposition 63 funds have been effectively spent.

An investigation by The Associated Press in 2012 found that tens of millions of dollars generated by the tax went to general wellness programs for people who had not been diagnosed with any mental illness. Those programs include yoga, gardening, art classes and horseback riding. The state auditor reported similar findings a year later.

"After 10 years the state still can't document whether $13 billion raised through the act has improved the streets of California and the lives of its residents," the commissioners wrote.

Voters approved a 1 percent tax on incomes over $1 million in 2004 as part of a ballot initiative that promised to boost funding to help the mentally ill, including prevention and early intervention programs. Counties are responsible for choosing and running their own programs, but an oversight commission was not established until eight years after the funding began, and it has little authority.

Because of that, the report said, there are few repercussions for sloppy accounting or insufficient data, making it difficult for the state to evaluate the programs.

Norman Williams, a spokesman for the state Department of Health Care Services, which oversees the mental health program, said agency officials were still reviewing the report Tuesday and could not comment. But he pledged that the agency would "work with county partners and others to ensure that the delivery of these important services is accomplished in an effective and efficient manner."

Commissioners said that during hearings on Proposition 63 last year they heard anecdotal stories of individual success, but the state cannot show "meaningful big-picture outcomes — such as reduced homelessness or improved school attendance."

The commission is made up of several lawmakers, former lawmakers and members of the public. Its report was sent to Gov. Jerry Brown and the state Legislature.

Unlike other ballot initiatives, Proposition 63's language allows the Legislature to amend it with a two-thirds vote and to clarify the law if it is deemed necessary.

Spokespeople for the two leaders of the state Legislature, Senate President Pro Tem Kevin de Leon, D-Los Angeles, and Assembly Speaker Toni Atkins, D-San Diego, declined to comment on the report Tuesday.

The commission recommends:

— A "prompt and dramatic review" of the oversight commission that includes expanding its authority;

— Requiring improved financial reporting;

— Using some of the money generated by the tax to create a modern data collection system, making data more easily accessible;

— Requiring early intervention programs that could be controversial to be cleared by the commission before they are adopted;

— Improve the program's website to make it easier for the public to see how and where the money is spent.

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