A dispute over state mental health funding appears headed to court following a recent decision by Gov. Arnold Schwarzenegger to eliminate a successful $55-million program for mentally ill homeless people.

   At issue is a complex provision of Proposition 63, the 1% "millionaires' tax" approved by voters in 2004 to overhaul California's troubled, historically cash-strapped mental health system.

   That ballot initiative, also called the Mental Health Services Act, was modeled largely on a $55-million program that has helped house and treat thousands of people who were mentally ill and living on the street. The program, which has served 13,000 people since 1999, has been a success. Participants spent far fewer days in hospitals and jails or on the streets than they had before enrolling.

   But Schwarzenegger cut the funding for the program in August -- perhaps the most controversial item among the $700-million worth of vetoes he delivered to break a budget impasse.

   The focus of the current dispute centers on a provision in Proposition 63 that prohibits the state from dropping below its 2004 funding levels for mental health -- funding in place when voters approved Proposition 63.

   That portion of the law was written to prevent the state from taking advantage of new funding, provided by the tax, to eliminate old programs and undermine the promise of the ballot initiative, the measure's proponents say.

   Mental health advocates believe that that part of the law, known as the "maintenance of effort" provision, should be interpreted strictly -- meaning that funding for the mental health system must be protected on a program-by-program basis.

   But in an Oct. 22 letter to the advocates, Department of Mental Health Director Stephen W. Mayberg suggested that despite the budget cut, the state remains in compliance with the law because overall funding for mental health has increased since approval of Proposition 63. By that measure, Mayberg wrote, the state "fully complies" with the law. He could not be reached for comment Wednesday.

   Mental health advocates have pledged to file a lawsuit against the state if the funding for the homeless-mentally ill program is not restored. Mayberg has staved them off for a bit by agreeing to meet later this month to discuss their differences.

   But there is little he could say to avert a lawsuit, said Jim Preis, executive director of Mental Health Advocacy Services, a public interest law firm in Los Angeles County. Indeed, Preis said, the dispute over the law's fine print probably will be the focus of the lawsuit. "The voters thought they were voting to increase services," Preis said.

   One of the people who wrote the law, state Sen. Darrell Steinberg (D-Sacramento), said that was always the intent.
 
 

   "The advocates are correct," Steinberg said. "The intent . . . was to keep intact the very program which laid the foundation for the Mental Health Services Act in the first place. Under no scenario or circumstance did I, as one of the authors, ever contemplate that the state would be able to cut core mental health funding."
 

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