California to redirect $2 billion toward housing mentally ill

State lawmakers on Monday announced a bipartisan pact to reroute $2 billion from a 12-year-old tax on millionaires to reduce homelessness among the mentally ill population the tax was created to serve.

“Republican and Democrats alike recognize that finding permanent supportive housing for the chronically homeless suffering from mental illness will improve the quality of life in our communities and give hope to thousands of Californians currently living in despair across our state,” Senate President Pro Tem Kevin de León, D-Los Angeles, said in a statement.

Two assembly bills make up the “No Place Like Home” initiative that its authors are calling landmark legislation. It will take funds generated by Proposition 63 and create shelter, housing and treatment programs for chronically homeless individuals with mental illness, including $10 million apiece for two specific subgroups of the homeless population—mentally ill veterans and youth. Assembly Republicans negotiated the carve outs, but also said they wanted more oversight over how the money will be spent, citing a 2013 state audit that found “that almost $7.4 billion” of Prop. 63 money “may not have been used appropriately and effectively to help treat the mentally ill,” a release from the Republican Assembly caucus states. The Little Hoover Commission also questioned the act’s effectiveness in January of last year, releasing a report that said the state could not “provide basic answers to basic questions” about the act’s benefits.

Voters approved Prop. 63, or the Mental Health Services Act, in 2004. Co-authored by Sacramento Mayor-elect Darrell Steinberg when he was an Assembly member, the act levied an income tax surcharge of 1 percent on every dollar over $1 million that California residents earned annually.

Steinberg has supported the housing initiative, but one of the act’s co-authors, Rose King, has called it a raid on an already misspent trust fund.