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Mental Health Association In California et al v. Arnold Schwarzenegger

December 9, 2010

MENTAL HEALTH ASSOCIATION IN CALIFORNIA ET AL., PLAINTIFFS AND APPELLANTS,
v.
ARNOLD SCHWARZENEGGER, AS GOVERNOR, ETC., ET AL., DEFENDANTS AND RESPONDENTS.



Superior Court of Alameda County, No. RG07361190, Frank Roesch, Judge. (Alameda County Super. Ct. No. RG07361190)

The opinion of the court was delivered by: Pollak, Acting P.J.

CERTIFIED FOR PUBLICATION

Several organizations dedicated to providing advocacy, education and support services in the field of mental health*fn1 and several individuals who have been recipients of assistance from the former Homeless Adults Program, appeal from the denial of their petition for a writ of mandate to compel the State of California*fn2 to reinstitute that program. Appellants contend that the removal from the state's budget of funding for the Homeless Adults Program, which occurred as the result of a gubernatorial veto in 2007, violates the provisions of the Mental Health Services Act (MHSA), which was approved by the voters as Proposition 63 on the November 2004 ballot. That measure imposed a new tax to fund the expansion of mental health services and added to the Welfare and Institutions Code*fn3 section 5891 which, as originally enacted, reads as follows: "The funding established pursuant to this act shall be utilized to expand mental health services. These funds shall not be used to supplant existing state or county funds utilized to provide mental health services. The state shall continue to provide financial support for mental health programs with not less than the same entitlements, amounts of allocations from the General Fund and formula distributions of dedicated funds as provided in the last fiscal year which ended prior to the effective date of this act. The state shall not make any change to the structure of financing mental health services, which increases a county's share of costs or financial risk for mental health services unless the state includes adequate funding to fully compensate for such increased costs or financial risk. These funds shall only be used to pay for the programs authorized in Section 5892. These funds may not be used to pay for any other program. These funds may not be loaned to the state General Fund or any other fund of the state, or a county general fund or any other county fund for any purpose other than those authorized by Section 5892." (Italics added.)*fn4 We conclude that the trial court correctly determined that termination of the Homeless Adults Program violated neither the "funding requirement" nor the "structure requirement" of section 5891.

Background

The Homeless Adults Program began in 1999 as a three-county demonstration project to provide extended community mental health services and outreach to mentally ill adults who are homeless or at risk of homelessness. (Stats. 1999, ch. 617, § 1.) The Director of the California Department of Mental Health (the Department) was directed to devise a methodology for awarding grants to counties consistent with the priorities set forth in the legislation. (See §§ 5814, subd. (a)(2), 5802.) These projects were considered highly successful and the following year Assembly Bill No. 2034 (AB 2034) was enacted providing additional funding to expand to additional counties what became known as the "AB 2034 program." (Stats. 2000, ch. 518, § 1; see § 5814.) As the trial court found, "It is not disputed that, since its inception the AB 2034 program has been a tremendously valuable and effective program addressing the needs of homeless adults who suffer mental illness."*fn5

In November 2004, the voters passed Proposition 63, enacting the MHSA, adding numerous provisions to the Welfare and Institutions Code and the Revenue and Taxation Code.*fn6 As summarized by the legislative analyst in the official voter information guide, the proposition "establishes a state personal income tax surcharge of 1 percent on taxpayers with annual taxable incomes of more than $1 million. Funds resulting from the surcharge would be used to expand county mental health programs. [¶] . . . [¶] . . . The proposition specifies that the revenues generated from the tax surcharge must be used to expand mental health services and could not be used for other purposes. In addition, the state and counties would be prohibited from redirecting funds now used for mental health services to other purposes. The state would specifically be barred from reducing general fund support, entitlements to services, and formula distributions of funds now dedicated for mental health services below the levels provided in 2003-04." The measure created a Mental Health Services Fund to be administered by the Department, into which funds generated by the new tax surcharge were to be deposited and "all moneys in the fund are continuously appropriated to the department, without regard to fiscal years, for the purpose of funding" programs authorized by the act. (§ 5890, subd. (a).)

Following passage of the MHSA, in July 2005, the Department adopted a "County Non-Supplantation policy" to implement the statute. In a letter directed to all local mental health directors and others, the Department advised that "county non-supplanting under the MHSA consists of three requirements, all of which must be met in order for an expenditure to be eligible for reimbursement under the MHSA." The policy requires that funds be used for programs authorized in section 5892, that funds not "be used to replace other state or county funds required to be used to provide mental health services in fiscal year 2004-2005 (the time of enactment of the MHSA)," and that funds "be used on programs that were not in existence in the county at the time of enactment of the MHSA (new programs) or to expand the capacity of existing services that were being provided at the time of enactment of the MHSA (11/2/04)." The letter further advised that the policy "does not preclude a county from ceasing to fund programs that no longer meet the needs of the county and its stakeholders as long as the aggregate state and county funds required to be used to provide mental health services are used for such purposes." Also, the Department "does not intend to change the structure of mental health financing which would increase a county's share of cost or financial risk for mental health services." The Department subsequently promulgated regulations implementing the MHSA which include the non-supplantation requirements. (Cal. Code Regs., tit. 9, § 3410.) When additional MHSA funds have become available for distribution to the counties, the Department has reiterated the need to comply with the non-supplantation policy.

In 2003-2004, the Department's budget included $557,948,000 in state general fund monies dedicated to local assistance for mental health services, including administrative costs. This amount included funds for numerous categories of programs and services, including the Early Mental Health Initiative, Community Services--Other Treatment, Children's Mental Health Services, AIDS programs, Healthy Families programs, Managed Care, services for brain damaged adults, and Medicaid Early and Periodic Screening, Diagnosis and Treatment (EPSDT) benefits. In 2006-2007, the Department's budget for these and other new county mental health services was $740,069,000, and in 2007-2008, the fiscal year in which this action was filed, $741,444,000.

The AB 2034 program continued until August 2007, when the Governor exercised line-item veto authority to delete from the 2007-2008 budget the $54,850,000 that the Legislature had included for this program. The Governor's explanation for the deletion read as follows: "I am deleting the $54,850,000 legislative augmentation for the Integrated Services for Homeless Adults with Serious Mental Illness Program. While I support the goals of the program, this reduction is necessary to limit program expansions and to help bring ongoing expenditures in line with existing resources. To the extent counties find this program beneficial and cost-effective, it can be restructured to meet the needs of each county's homeless population using other county funding sources, such as federal funds, realignment funds, or Proposition 63 funds."

Analysis

1. Standard of Review

Appellants contend that the trial court erred in denying their petition for a writ of mandate under Code of Civil Procedure section 1085. To obtain such relief, the appellants must prove that the respondents are failing to perform "a clear, present, and usually ministerial duty . . . [and that appellants have] a clear, present and beneficial right to performance of that duty." (Morris v. Harper (2001) 94 Cal.App.4th 52, 58; Armando D. v. State Dept. of Health Services (2004) 124 Cal.App.4th 13, 21.) There being no facts in dispute, this court exercises its independent judgment in determining the matter. We agree with the trial court that appellants' causes of action for an injunction and for declaratory relief are redundant of their mandate petition; all appellants' claims present the same question of law, whether the termination of funding for the AB 2034 program violates the MHSA.

2. The elimination of funding does not violate the continuing support requirement of section 5891.

Appellants contend that the termination of funding for AB 2034 projects violates the MHSA requirement contained in section 5891, subparagraph (a) that the state "shall continue to provide financial support for mental health programs with not less than the . . . amounts of allocations from the General Fund . . . provided in [fiscal year 2003-2004]."*fn7 Appellants contend that this requirement means that funding for each specific mental health program that was in effect when the MHSA was adopted must be maintained at the level that existed for that program as of fiscal year 2003-2004. The Department maintains that "[b]y its terms, the MHSA refers to 'mental health programs' in the plural aggregate form; it does not purport to single out the individual programs for protection." The trial court agreed with the Department, explaining: "The plain language of the statute is a clear reference to the aggregate of 'programs.' If the drafters of Proposition 63 had intended to perpetuate the funding of each (or every) program in existence in 2004, they would have inserted the word 'each' (or 'every') to modify the ...


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