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Proposition 63 Passes In California:

A Tax On Incomes Over $1 Million To Expand Community-Based Programs For All People With Mental Illness

November 4, 2004

On November 3, 2004, California voters passed Proposition 63, which will invoke a 1% tax on all residents’ taxable income over $1 million.  Funds generated from this tax will be used to expand community-based mental health services and programs.

Sacramento Assemblyman Darrell Steinberg authored the Proposition 63 initiative, which was devised in response to an unfulfilled promise made in 1969 to fund the state's mental health system. Support for the initiative was fueled by the success of Steinberg’s Homeless Bill, which engaged Assertive Community Treatment-type teams who brought homeless individuals with mental illness off of the streets into shelters and guided many back to independent living. The Homeless Bill achieved success on a humanitarian and economic level – illustrating the potential for success for other programs to assist people with mental illness.

According to the Los Angeles County Director of Mental Health, Dr. Marvin Southard,"Given the current fiscal environment in California and the long history of inadequate investment in mental health services, Prop 63 is our first real shot at building a client-centered, family-focused, integrated mental health system to treat the thousands of our residents who need help."

Bill Lockyer, the Attorney General of California prepared the following summary of the chief purpose and points of Prop 63:

Financial Breakdown:

  • Imposes additional 1% tax on taxable income over $1 million to provide dedicated funding for expansion of mental health services and programs.
  • Will generate dditional revenues of approximately $250 million in 2004-05, $680 million in 2005-06, $700 million in 2006-07, and increasing amounts annually thereafter, leading to increases in expenditures by the state and counties for the expansion of mental health programs.
  • Results in unknown savings to the state and local agencies - potentially amounting to hundreds of millions of dollars annually – due to reduced costs for state prison and county jail operations, medical care, homeless shelters, and social services programs.
  • Current funding for mental health programs may not be reduced because of funding from new tax.

Implementation of Services:

  • Provides funds to counties to expand services and develop innovative programs and integrated service plans for children, adults and seniors with mental illness.
  • Requires state to develop mental health service programs including prevention, early intervention, education and training programs.
  • Creates new commission to approve certain county programs and expenditures.
  • Each county in California will create its own mental health plan and will submit this expanded plan to the new oversight Commission for approval of its program and expenditures.

NAMI leaders and members throughout the state of California were part of the coalition of providers, professionals and agencies who played an integral role in bringing Proposition 63 to the ballot.

NAMI National applauds these efforts and hopes to see further legislation of this nature on future ballots across the nation.


"Thank you for making this dream come true; thank you for your vision; thank you for believing in a better California; and thank you for fulfilling our promise. Do not underestimate your achievement. We have done something together that few thought possible." - Initiative author Sacramento Assemblyman Darrell Steinberg