Next year marks the tenth anniversary of two key ballot measures that promised to improve Californians’ lives. Voters in 2004 eagerly approved Proposition 71, the California Stem Cell Research and Cures Act, which floated $3 billion in bonds to fund a state-run embryonic stem-cell research institute, and Proposition 63, which levied a surtax of 1 percent on multimillionaires, ostensibly to fund mental-health services. A decade on, voters and taxpayers might wonder whether the billions raised were well spent. Prop. 71 promised to deliver life-saving cures and therapies for a host of diseases, but it’s succeeded only in spending money and directing funds to the institute’s founder, Robert Klein, and his cronies. As for Prop. 63, the Mental Health Services Act, not even state auditors, who completed a study last month, know where all the money has gone.

Prop. 63 was the brainchild of state senate pro tem Darrell Steinberg. The Sacramento Democrat wanted to hike taxes on the rich to pay for more local mental-health treatment facilities. As revenue generation goes, Steinberg’s plan worked wonderfully well, raising and spending $7.4 billion between 2006 and 2012. “Was the money spent wisely? Did the money do as much good as it should have done? Was it shoved down a rat hole, never to be seen again?” That may sound like a press release from the Howard Jarvis Taxpayers Association, but it comes from a Sacramento Bee editorial. The Bureau of State Audits found lots of questionable spending, including “yoga, horseback riding, gardening, the purchase of iPads, and a slick public relations video that is being passed off as a serious documentary about [mental illness] stigma.” According to the audit, about 750,000 adult Californians didn’t receive the mental-health treatment they sought in 2012, even as thousands of mentally ill Californians remain homeless or locked up in county jails or state penitentiaries. (Most county jails, in fact, have no in-patient psychiatric services.) Prop. 63’s failure, the Bee editorial concludes, “fuels public skepticism about government’s ability to use the people’s money for the greatest good.” No kidding. Similarly, University of California law professor Barry Krisberg laments how Prop. 63 provided “virtually no oversight or accountability” for how the money would be spent, likening the law’s weak standards to “putting money on the stump and running.”

But Steinberg remains convinced that Prop. 63 is an advance for mental-illness treatment in the Golden State. After last year’s mass murder at Sandy Hook Elementary School in Newtown, Connecticut, Steinberg urged President Obama to adopt Proposition 63 as a national model, with new federal taxes matching state mental-health expenditures dollar for dollar. If Obama wants a model, the San Jose Mercury-News editorialized, “he needs to find a better one than California.” The net result of Steinberg’s measure is “fewer psychiatric hospital beds, fewer doctors treating patients and fewer clinics across the state,” as state and local mental-health providers have focused more on outpatient treatment.

The collapse of mental-health services isn’t limited to California, of course. But Prop. 63 was always less about making sound policy and more about redistributing wealth to state and local bureaucracies, which frittered away billions. It’s forgotten now, but the case for Prop. 63 boiled down to a class-warfare appeal. California Democrats argued for Prop. 63 in part by attacking President George W. Bush’s 2001 tax cuts. They claimed that the initiative would boost taxes only modestly on the rich, who could surely afford to pay more, since Bush had cut their taxes so much. Cloaking a tax hike as a mental-health measure proved a winner at the polls, even if Californians have little to show for it ten years later.

Ironically, 30-plus years after it was passed, Proposition 13—which limited the state’s power to raise property taxes, mandated no new spending, and created no new state agencies—remains a favorite target of California politicians. Props. 63 and 71, by contrast, raised taxes, created new bureaucracies, allowed spending galore, and have done little except enrich a well-connected few. Given that track record, California taxpayers will have good reason to be skeptical of the next ballot initiative that comes along donning a white coat.


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