California Proposition 63 (2004)

California Proposition 63 (2004)

Proposition 63 was a California ballot proposition on the November 2, 2004 ballot. Its official name and title on the ballot was the Mental Health Services Act. It passed with 6,191,691 (53.8%) votes in favor and 5,337,216 (46.2%) against. In California, only twelve initiatives affecting taxes have passed. Of these twelve, only three have increased taxes: Proposition 99 passed in 1988, Proposition 10 passed in 1998, and Proposition 63 passed in 2004. The initiative was written by then Assemblyman Darrell Steinberg (who later became a State Senator) and mental health lobbyist Sherman "Rusty" Selix.

• The new tax is to affect the wealthiest 0.1 percent of California’s taxpayers, which amounts to approximately 30,000 taxpayers. With the passage of Proposition 63, this group earning more than $1 million would experience a change in tax rate from 9.3 percent to 10.3 percent on every dollar they made over $1 million. This would result in approximately a 31 percent increase to the previous to Proposition 63's annual mental health budget of $2.6 billion. These funds are to be used to transform the State’s public mental health system, expand it, and revolutionize the existing system with a focus on promoting recovery-oriented programs.

• The Mental Health Services Act (MHSA) was projected to generate approximately $254 million in the 2004-2005 fiscal year, $683 million in 2005-06 fiscal year, and then increasing amounts subsequently. Much of the funding will provide county mental health programs funds for programs consistent with their local plans. Furthermore, uncommitted funds during FY 2005-06 will be used to establish county reserve accounts as required by the MHSA.
• Overall, since the 2004-05 fiscal year, $7.4 billion has been collected and placed into the Mental Health Services Fund.

A later ballot measure, Proposition 1E appeared on the May 19, 2009 special election ballot. This measure would have authorized a fund-shift of approximately $230 million annually in income tax surcharge revenue currently earmarked for Proposition 63. However, the measure was defeated.