The California Behavioral Health Services Act — formerly the Mental Health Services Act — is undergoing reforms that aim to expand services and redirect funding to address housing instability and homelessness among residents with behavioral health conditions, according to the California Budget & Policy Center website.
Here are eight things to know:
- The Mental Health Services Act, passed in 2004, was renamed the Behavioral Health Service Act under Proposition 1. The update expands the law’s scope to include treatment for substance use disorders and restructuring funding to include a new category for housing interventions.
- Counties are required to begin implementing BHSA Integrated Plans by July 1. These plans will guide the use of all behavioral health funds — local, state and federal — and must include a robust community engagement process.
- Funds allocated through the act account for about 30% of total county behavioral health budgets, making them a critical source of support for treatment and housing services.
- Thirty percent of BHSA dollars must go toward housing and housing-related services unless a county receives an exemption. The Department of Health Care Services estimates $950 million will be available statewide for housing in fiscal 2026-2027.
- Counties can reallocate up to 7% of BHSA funds between categories to better meet local needs. They can also request to move another 7% for a total of 14% allocation. Small counties may request additional exemptions starting in 2026.
- Proposition 1 created a $6.38 billion general obligation bond to fund behavioral health treatment beds, residential facilities, and supportive housing for veterans and people at risk of experiencing homelessness.
- All housing services supported by the BHSA must align with Housing First guidelines, meaning they must use low-barrier, harm-reduction models in both interim and permanent settings.
- Integrated plans must now include all behavioral health revenue, not just BHSA dollars. This includes opioid settlement funds and other local, state and federal resources.
