The Mental Health Services Act

More than 2 million children, adults, and seniors are affected by potentially disabling mental health challenges every year in California.

To ensure all people get the help they need, state voters in 2004 approved Proposition 63, also known as the Mental Health Services Act (MHSA). This sweeping law calls for transformation of the mental health system while improving the quality of life for Californians living with mental health challenges.

The MHSA levies a 1 percent tax on personal incomes above $1 million and generates enough dollars each year to fund nearly 25 percent of the state’s public mental health system. Its proceeds support a wide range of prevention, early intervention, treatment services, and the development of the infrastructure, technology, and workforce needed to deliver them.

The MHSA embodies a bold vision of a mental health system that emphasizes recovery and puts consumers of mental health services and their families, along with other stakeholders, at the center of decision-making.

“One of the main goals of early intervention is to reduce the length of time a person remains psychotic in order to improve their chances of a good recovery.”
Tara Niendam

Associate Professor , University of California, Davis

View the complete act in PDF format

Proposition 63: A Historical Perspective

In 1967, California shut down many state hospitals for people with severe mental health challenges without adequately funding community-based mental health services to serve them.

The impacts of that deinstitutionalization were many and lasting and notably included many people with unmet mental health needs experiencing homelessness.

To address the urgent need for accessible, community-based mental health services focusing on recovery, California voters passed Prop. 63, which went into effect in 2005. It provided the first opportunity in many years to expand county mental health programs for all populations, including children, transition-age youth, adults, older adults, families, and most significantly, the unserved and underserved.

However, the economy took a severe downturn soon after Prop 63 passed, and in many cases, rather than expanding the continuum of services, counties used MHSA money to maintain current levels of services because it was the only source of stable funding.

Over time, the vital role Prop. 63 money plays in maintaining county services grew: Funds from the Act initially accounted for 10 percent of California’s public mental health budget, and that number is now approximately 24 percent.

No Place Like Home

The MHSA provided critical funding to make possible the No Place Like Home (NPLH) program, a $2 billion bond initiative to develop permanent supportive housing for people in need of mental health services who were also experiencing or at risk of experiencing homelessness, particularly chronic homelessness.

Governor Jerry Brown signed legislation providing for the NPLH program in July 2016, and voters ratified that decision in November 2018 with Prop. 2, which authorized the use of MHSA money to repay the bonds.

Key features of the program include:

  • Counties are eligible to apply (either solely or with a housing development sponsor).
  • Permanent supportive housing programs that receive funding must use low barrier tenant selection practices that prioritize vulnerable populations and offer flexible, voluntary, and individualized supportive services.
  • Counties must commit to providing mental health services and helping coordinate access to other community-based supportive services.

Find more details on the CA Housing and Community Development website.


NPLH grants support the acquisition, design, construction, rehabilitation, or preservation of permanent supportive housing for people in need of mental health services who are experiencing homelessness or chronic homelessness or who are at risk of chronic homelessness.

Population to be Served

No Place Like Home funds supportive housing programs that serve a wide variety of clients, ranging from children with severe emotional disorders and their families to adults with serious mental illness.

“At risk of chronic homelessness” includes people who are at high risk of long-term or intermittent homelessness, including people with mental health challenges exiting institutionalized settings who had a history of homelessness before institutionalization, and transition-age youth experiencing homelessness or facing significant barriers to housing stability.

The 5 Components of the MHSA

  1. Community Services & Support

    Community Services & Support (CSS) is the largest component of the MHSA. CSS provides direct services to individuals with severe mental illness using a client-centered, wellness, and recovery-focused approach, including housing.

  2. Prevention & Early Intervention

    The goal of the Prevention & Early Intervention (PEI) component of the MHSA is to help counties prevent negative outcomes by intervening early in the onset of mental health needs with timely access to services and support. The MHSA requires collaboration with consumers and family members in the development of PEI projects and programs.

  3. Innovation

    The MHSA’s Innovation component aims to explore and develop new mental health models that improve the quality of services, promote collaboration, and increase access to services. Counties propose Innovation plans to the Commission, which selects candidates for funding.

  4. Capital Facilities & Technologies Needs

    The Capital Facilities & Technological Needs (CFTN) component supports the development of facilities and technologies used for administrative services or delivery of mental health services. Counties may use these funds to underwrite peer-support and consumer-run facilities, develop community-based settings, and build technological systems to deliver services.

  5. Workforce Education & Training

    The Workforce Education & Training (WET) component supports the building of diverse mental healthcare workforces to include the viewpoints and expertise of clients and their families/caregivers and provide services that are linguistically and culturally competent.

3-Year Plans

Welfare and Institutions Code Section (WIC) § 5847 states that county mental health programs shall prepare and submit a Three-Year Program and Expenditure Plan (Plan) and Annual Updates for Mental Health Service Act (MHSA) programs and expenditures.

The County Board of Supervisors must adopt and submit plans and updates to the Mental Health Services Oversight and Accountability Commission (MHSOAC) within 30 days of Board of Supervisors adoption.

WIC § 5848 states the mental health board shall conduct a public hearing on the draft three-year program and expenditure plan at the close of the 30-day comment period.

WIC § 5891 states that MHSA funds only pay for MHSA programs.