Meeting Date:

01/27/2026

Brief Title

Behavioral Health Services Act (BHSA) Update

Subject

Recommended Action

Strategic Plan Goal(s)

Thriving Residents

Reason for Recommended Action/Background

The Mental Health Services Act (MHSA), passed in 2004 as Proposition 63, created a 1% tax on personal incomes over $1 million. It was designed to expand and transform California’s mental health system to better serve individuals with, and at risk of, serious mental health issues and their families. The MHSA addressed a broad continuum of prevention, early intervention, and service needs, as well as the necessary infrastructure, technology, and training elements that support the public mental health system. Counties were responsible for ensuring compliance with Welfare and Institutions (W&I) Code and State guidance, to allocate and expend funds in the following categories:

• Innovations (INN) – 5 percent
• Prevention and Early Intervention (PEI) – 19 percent
• Community Services and Supports (CSS) – 76 percent

In March 2024, voters approved Proposition 1 to reform the Mental Health Services Act (MHSA) and replace it with the Behavioral Health Services Act (BHSA). It reforms behavioral health care funding to prioritize services for people with the most significant mental health needs while adding the treatment of substance use disorders (SUD), expanding housing interventions, increasing the behavioral health workforce, and accountability and transparency for county administered, publicly funded behavioral health programs. These reforms also significantly increase county responsibilities for planning, reporting, and stakeholder engagement. Proposition 1 changes the way in which Proposition 63 revenues are expended by county behavioral health plans and marks the transition from the “Mental Health Services Act (MHSA)” to the “Behavioral Health Services Act (BHSA).”  The most notable aspects of this shift are:

County allocations will be reduced from 95% to 90%

• Additional 5% (~$1m) redirected to California Department of Public Health for Population Prevention

New BHSA Components (replaces MHSA CSS, PEI, and INN):

• Full-Service Partnerships (35%; FY 26-27 Projected Revenue $6.8m)
  • Includes mental health, supportive services, and substance use disorder treatment services
• Behavioral Health Services and Supports (35%; FY 26-27 Projected Revenue $6.8m)
  • Includes Early Intervention (EI), Outreach and Engagement, Workforce Education and Training; Capital Facilities; Technological Needs; Innovation pilots
  • 51% of Behavioral Health Services and Supports (BHSS) Funds must be used for EI programs; 51% of EI funding must be used to serve individuals age 25 & younger
• Housing Interventions (30%; FY 26-27 Projected Revenue $5.8m)
  • For children and families, youth, adults, and older adults living with SMI/SED and/or SUD who are experiencing or at risk of homelessness. Includes rental subsidies, operating subsidies, shared and family housing, capital, and the non-federal share for certain transitional rent
  • 50% prioritized housing interventions for the chronically homeless. Up to 25% may be used for capital development

 

BHSA Reporting and Administrative Requirements
Category	Requirements
Planning Framework	Three-Year Integrated Plan (IP) covering all behavioral health funding sources (BHSA, Medi-Cal, Realignment, federal grants, opioid settlement funds, and local behavioral health funding)
Annual Updates	Annual Update to IP includes cross-system goals, updated demographics, stakeholder input, and performance metrics for all behavioral health funding sources
Community Engagement	Expanded Community Planning Process with 30 required stakeholders and integration with other local planning efforts
Evidence Based Practices	Required evidence-based and community-defined practices by July 1, 2026, and fidelity by July 1, 2029
Scope of Services	Expanded scope includes mental health, substance use disorder treatment, housing supports, homeless housing, and crisis care
Funding Integration	Multi-source integration across BHSA, Medi-Cal, Realignment, federal/state/local funds
Youth & Cultural Representation	Mandatory youth representation on boards and culturally responsive planning processes
Plan Submissions to DHCS and Implementation Timelines (fixed deadlines)	Draft Plans Due March 31st annually Final Plans Due June 30th annually

BHSA Priority Populations
BHSA establishes targeted priority populations to guide counties in planning and delivering behavioral health services. These groups represent individuals with elevated behavioral health needs and higher risk of poor outcomes.

Population Group	BHSA Priority Criteria
Children and Youth	Experiencing homelessness, chronically homeless, or at risk of homelessness In, or at risk of involvement in, the juvenile justice system Reentering the community from a youth correctional facility In the child welfare system (e.g., foster care) At risk of institutionalization (e.g., psychiatric hospitalization or similar settings)
Adults and Older Adults	Experiencing homelessness, chronically homeless, or at risk of homelessness In, or at risk of involvement in, the justice system Reentering the community from jail or prison At risk of conservatorship At risk of institutionalization

BHSA Evidence-Based Practices
Counties are required to provide the following Evidence Based Practices (EBPs):

• Assertive Community Treatment (ACT)
• Forensic ACT (FACT)
• FSP Intensive Case Management (ICM)
• Individual Placement and Support (IPS) model of Supported Employment
• High Fidelity Wraparound (HFW)
• Assertive field-based initiation for SUD
• Coordinated Specialty Care (CSC) for First Episode Psychosis (FEP)

BHSA Integrated Plan and Reporting
New BHSA requirements include the requirement for a Three-Year Integrated Plan (IP), a Behavioral Health Outcomes and Accountability Transparency Report (BHOATR), and an Annual Update. The Three-Year Integrated Plan requires broad community engagement and extensive stakeholder input to outline priorities, program investments, and outcome measures across all systems of care, ensuring alignment with both state guidance and local needs. The BHOATR establishes new state-mandated performance metrics, fiscal transparency requirements, and data reporting standards that require extensive analysis and cross-program coordination to ensure accuracy and completeness. Counties will be required to submit annual reports detailing expenditures of all local, state, and federal behavioral health funding (including the Behavioral Health Services Act, Realignment funding, federal Substance Abuse and Mental Health Services Administration and PATH grants, opioid settlement funds, and Medi-Cal). Reports must also include unspent funds; service utilization and outcome data analyzed through a health equity lens (e.g., service encounters, utilization rates by population groups, equity indicators by race, ethnicity, age, and service type [mental health/substance use disorder]); outcomes aligned with statewide behavioral health goal metrics (such as reductions in homelessness, institutionalization, and justice involvement); indicators of intervention effectiveness within the Integrated Plan; workforce metrics (e.g., staffing levels and workforce shortages); and other relevant information.

Community Planning Process
In addition to the above-mentioned requirements, the BHSA includes Community Planning Process (CPP) requirements that have expanded, mandating robust stakeholder engagement with diverse populations, including consumers, family members, community partners, and underserved groups, along with clear documentation of how feedback is incorporated into planning, funding priorities, and program design. Counties are not required to conduct the full stakeholder engagement process for annual updates; this requirement applies only to the Three-Year Integrated Plan.

The Yolo County BHSA FY 2026-2029 Behavioral Health Integrated Plan (BHIP) kickoff began Wednesday, September 10th with a Community Engagement Work Group (CEWG) meeting. The county has completed 4 listening sessions, 35 key informant interviews, 6 focus groups, and received 268 community survey responses. In total, the CPP engaged 514 community members through a combination of data collection efforts, informational sessions, and interviews to date.

BHSA Component Fiscal Summary FY 2026-2027
Previous revenue projections provided to the board were approximately $16.8m. Updated projections now anticipate revenue of $19.4m. The table below summarizes the projected BHSA Annual Revenue Allocations:



FY26-27 Expenditure Projection: Estimated $2.3-$3.3 million deficit, which exists primarily within the BHSS Non-Early Intervention category. BHSA funding categories are inclusive of administrative costs. Projected fund balance of $12.4 million will require board guidance for utilization for future years.

BHSA Local Planning Considerations
Local planning considerations include balancing statutory compliance with BHSA’s new funding rules, financial uncertainty, program restructuring, and increased planning and reporting burdens, all while trying to preserve services for vulnerable populations and maintain meaningful community engagement. As HHSA continues programming and budget development there are several noted considerations:

1. Increase in projected revenue from $16.8m to $19.4m in FY 26/27
2. Projected fund balance of $12.4 million.
3. Capacity need to increase Med-Cal billing
4. The combination of funding shifting from mental health services to housing (~$5m) and the unique requirements of the BHSS categorical funding, creates an estimated deficit of approximately $2.3- 3.3 million.
5. Resolving the deficit will require either a significant reduction in existing programming in Non-Early Intervention (crisis services, treatment, etc), or the use of fund balances.

A summary of community findings, along with proposed BHSA programs, will be presented at a future BHSA Board update for feedback and direction.

Background
For additional BHSA details, please refer to the Department Of Health Care Services BHSA County Policy Manual, BHSA County Reporting timeline (infographic), and informational MHSA vs BHSA funding overview.

Collaborations (including Board advisory groups and external partner agencies)

Fiscal Impact

No Fiscal Impact

Fiscal Impact (Expenditure)

Total cost of recommended action:

$   

Amount budgeted for expenditure:

$   

Additional expenditure authority needed:

$   

On-going commitment (annual cost):

$   

Source of Funds for this Expenditure

General Fund

$0

Attachments

• Att. A. Presentation
• Att. B. Comments from First 5 Yolo

Form Review

Form Started By:

Jonathan Bartlett

Started On:

11/18/2025 10:04 AM

Final Approval Date:

01/22/2026