MENTAL HEALTH ASSN. IN CALIFORNIA v. SCHWARZENEGGER No. A125937.
190 Cal.App.4th 952 (2010)
MENTAL HEALTH ASSOCIATION IN CALIFORNIA et al., Plaintiffs and Appellants, v. ARNOLD SCHWARZENEGGER, as Governor, etc., et al., Defendants and Respondents.
Court of Appeals of California, First District, Division Three.
December 9, 2010.
Howard Rice Nemerovski Canady Falk & Rabkin, Steven L. Mayer ; Disability Rights California, Daniel Brzovic , Andrew Mudryk , Sean Rashkis ; Western Center On Law & Poverty, Inc., Kimberly Lewis , Richard A. Rothschild , Jennifer A. Flory ; Mental Health Advocacy Services, James Preis ; National Center For Youth Law and Patrick Gardner for Plaintiffs And Appellants.
Edmund G. Brown, Jr. , Attorney General, Douglas M. Press , Assistant Attorney General, Karin S. Schwartz , Julie Weng-Gutierrez , Niromi W. Pfeiffer and Sarah E. Kurtz , Deputy Attorneys General, for Defendants and Respondents.
Several organizations dedicated to providing advocacy, education and support services in the field of mental health
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 were homeless or at risk of homelessness. (Stats. 1999, ch. 617, § 1, p. 4345.) The Director of the State 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 (1999-2000 Reg. Sess.) (Assembly Bill 2034) was enacted providing additional funding to expand to additional counties what became known as the "AB 2034 program." (See Stats. 2000, ch. 518, § 1; § 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."
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,
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 $54.85 million 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."
1. Standard of Review
2. The elimination of funding does not violate the continuing support requirement of section 5891.
Appellants contend that the termination of funding for Assembly Bill 2034 projects violates the MHSA requirement contained in section 5891, subdivision (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]."
The 2003-2004 budget contains no specific mention of the AB 2034 program. Funds for that program, as for other programs, were included within a much larger budget item, item No. 4440-101-0001, "For local assistance, Department of Mental Health," and within a schedule included in that budget item for "Community Services—Other Treatment." That schedule also included appropriations for "Community Services—Children's Mental Health Services," "Community Services—AIDS," and "Community Services— Healthy Families." Appellants' interpretation of section 5891 would deprive the Department of its ability to contract any of these programs or to shift funds between programs as needs, circumstances and priorities change, at odds with other statutory provisions requiring the Department to constantly reevaluate the effectiveness of all programs for which it provides funding. (§§ 5814, subds. (a)(3)(A) & (b), 5847, subds. (b), (d), (f), (g)(1).) As the Department argues, under appellants' view of the statute, "it would appear that every program, including discretionary grants and contracts for mental health services, that existed in 2003-2004, would have to be fully funded in perpetuity, even if the program had never appeared as a budget line item, and even if the program became outdated in future years due to improved knowledge of mental health and/or the advent of more effective programs."
Appellants are correct that both the MHSA itself and the ballot argument in favor of the measure did refer specifically to the AB 2034 program and indicate that the measure was intended to expand such innovative programs. The findings and declarations with which the MHSA begins refer to the "recent innovative approach" begun in 1999 and "recognized in 2003 as a model program by the President's Commission on Mental Health," which "combines prevention services with a full range of integrated services to treat the whole person, with the goal of self-sufficiency for those who may have otherwise faced homelessness or dependence on the state for years to come." (Voter Information Guide, supra, text of Prop. 63, § 2, subd. (e), pp. 102-103.) The next section states that the purpose and intent of the measure includes "expand[ing] the kinds of successful, innovative service programs for children, adults and seniors begun in California." (Id., § 3, subd. (c), p. 103.) The rebuttal ballot argument in favor of Proposition 63 stated that the program had been recognized as "a model for the nation," but that the program was then reaching fewer than 10 percent of those who could benefit from it, and that "Proposition 63 makes this new model program
Moreover, the MHSA explicitly contemplates using funds from the Mental Health Services Fund to support services such as those that were provided under the Assembly Bill 2034 program. Section 5813.5, part of the MHSA, provides that subject to the availability of funds within the Mental Health Services Fund, the Department "shall distribute funds for the provision of services under Sections 5801, 5802 and 5806 to county mental health programs." Those three sections are within the preexisting Adult and Older Adult Mental Health System of Care Act and prescribe the basic approach and standards that were incorporated in the AB 2034 program. Section 5801, subdivision (a)(4), for example, provides that "[s]eriously mentally disordered adults and older adults should have an interagency network of services with multiple points of access and be assigned a single person or team to be responsible for all treatment, case management, and community support services." Section 5802, subdivision (a)(1) provides that "[a] comprehensive and coordinated system of care includes community-based treatment, outreach services and other early intervention strategies, case management, and interagency system components required by adults and older adults with severe and persistent mental illness." Section 5802, subdivision (d)(4) declares that it is the intent of the Legislature to "[p]rovide funds for counties to establish outreach programs and to provide mental health services and related medications, substance abuse services, supportive housing or other housing assistance, vocational rehabilitation and other nonmedical programs necessary to stabilize homeless mentally ill persons or mentally ill persons at risk of
Section 5890, also part of the MHSA, provides that funds are continuously appropriated from the Mental Health Services Fund "for the purpose of funding the following programs and other related activities as designated by other provisions of this division: [¶] [Section 5800 et seq.], the Adult and Older Adult System of Care Act." (§ 5890, subd. (a)(1).) Section 5892 provides further specificity with respect to the expenditure of funds from the Mental Health Services Fund, but explicitly includes the distribution of funds for each county mental health program under section 5800 et seq. (§ 5892, subds. (a)(5) & (6), (b).) Thus, the portion of section 5891 stating, "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," must be understood to anticipate the expenditure of funds generated by the MHSA to support county mental health service programs for homeless or potentially homeless persons comparable to those programs that had been supported with grants under the AB 2034 program.
As the trial court observed, and as confirmed by the figures cited above, appellants "do not contest that the elimination of the AB 2034 Program did not reduce the amount of funding the state provides from the general fund for mental health programs to an amount less than provided in FY 2003/2004." The Department emphasizes that "the state spent approximately $240 million more in general fund expenditures in the fiscal year this action was filed (2007-2008) for five appropriation items for county mental health services than it spent on the four items that existed in 2003-2004." While not disputing these figures, appellants point out that "this was due entirely to the state's increase in funding for EPSDT, the Medi-Cal program for children funded jointly by the federal government, the state, and the counties. Because EPSDT is an entitlement, expenditures must be increased to whatever amount is needed to provide federally mandated EPSDT services to all eligible individuals. As a result, the state's portion of EPSDT expenditures, which are paid in part by the general fund, has grown substantially every year since the pre-MHSA baseline year against which compliance with the [MHSA] is measured."
Finally, the trial court also justified its conclusion with the observation that appellants' interpretation of the statute "would violate the proscription against divesting the Legislature of its proper role," citing California Constitution, article IV, section 12 and People's Advocate, Inc. v. Superior Court (1986) 181 Cal.App.3d 316 [226 Cal.Rptr. 640]. Appellants question the holding in People's Advocate and argue that because the MHSA is an initiative statute, rather than a statute adopted by the Legislature, their interpretation would not violate the state Constitution. (See Cal. Const., art. II, §§ 8, 10; Jensen v. Franchise Tax Bd. (2009) 178 Cal.App.4th 426, 440-441 [100 Cal.Rptr.3d 408]; Watson v. Fair Political Practices Com. (1990) 217 Cal.App.3d 1059, 1072-1073 [266 Cal.Rptr. 408]; Shaw v. People ex rel. Chiang (2009) 175 Cal.App.4th 577, 615 [96 Cal.Rptr.3d 379].) Appellants also assert that the constitutional issue applies to either interpretation of the statute, but since the state has continued to provide aggregate mental health funding at the 2003-2004 level, the issue does not arise under the construction of the statute urged by the Department and adopted by the trial court. We need not and do not resolve the constitutional question, but note that our reading of the statute has the salutary effect of avoiding the constitutional issue. (See, e.g., Clare v. State Bd. of Accountancy (1992) 10 Cal.App.4th 294, 303 [12 Cal.Rptr.2d 481].)
3. The elimination of funding does not violate the structure requirement of section 5891.
In support of their contention that the elimination of the AB 2034 program changed the structure of mental health care financing, appellants argue, "Before the program was eliminated, thousands of homeless mentally ill Californians were receiving services which, though provided by the counties or their contractors, were nevertheless state funded. The elimination of the Program, by definition, eliminated this funding and thereby changed `the structure of financing mental health services.'" We do not believe the issue can be resolved so simply. Despite any indirect financial consequences that may result from terminating a particular program, the reduction or elimination of funding for a single program cannot fairly be regarded as a "structural" change. Much closer to the mark is the Department's understanding that a structural change is one "that directly cause[s] a change of responsibility and an increase in financial risk to the counties, such as realignment, county-managed care plans, and increases in the percentage of costs of specific services that counties [are] required to pay." The Department contrasts the elimination of funding here with three illustrations of what, as appellants recognize, unquestionably were structural changes: the 1991 transfer of financial responsibility for mental health programs from the state to the counties, referred to as "realignment"; the mid-1990's decision to provide most Medi-Cal mental health services through managed care plans at the county level rather than through the previous fee-for-service system in which providers billed the state; and the 2003 shift to the counties of 10 percent of the cost of the nonfederal match for EPSDT growth over the baseline amount.
Appellants argue that as a result of eliminating the Assembly Bill 2034 grants, those counties that received such grants have been compelled to pay the local share of Medi-Cal-funded mental health care services that are not federally reimbursed and were formerly paid with Assembly Bill 2034 grant money; that the elimination of the Assembly Bill 2034 grants increases the hospitalization and incarceration rate for those who formerly received services funded by those grants, increasing county-mandated costs for mental health services for those individuals; and that the elimination of the grant program also increases the counties' cost of providing mental health services that are not mandated by statute or regulation. While acknowledging that these are at most indirect consequences of eliminating the AB 2034 program, appellants argue that the prohibition of structural changes in section 5891, subdivision (a) is not limited to changes that "directly" impact the counties.
4. Other issues.
In view of the conclusions we have reached above, it is unnecessary to consider the additional arguments advanced by the Department in support of the judgment in favor of the Governor and the denial of declaratory and injunctive relief. We also reject appellants' contention that the trial court erroneously excluded evidence tending to show accomplishments of the AB 2034 program and the increase of indirect costs to the counties as a result of the program's elimination. None of the proffered evidence would alter any of the conclusions expressed herein.
The judgment is affirmed.
Siggins, J., and Jenkins, J., concurred.
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