Taxing millionaires to build healthier communities

SAN FRANCISCO - In 1972, Lillian Hoffman (not her real name) moved here with her three children to escape a violent husband, poor job prospects, and the racial oppression of the south. Despite severe trauma and debilitating depression, Lillian found work as a teacher's aide and cleaned houses on weekends to make ends meet. When she retired at 65, she was looking forward to a new, quiet phase in life.

For years, Lillian had struggled to keep her family safe and healthy amid the rising poverty, joblessness and growing crack cocaine epidemic in Bayview-Hunter's Point.  When one of her kids got caught up in community violence and drug use, Lillian took over raising first one, and then several, grandkids.

Just after Lillian turned 67, a grandson was shot and killed. Grieving and fearful that her family's addictions were turning her home into a crack house, she decided to take drastic action and evicted all her children. After years of carefully navigating Section 8 housing, Lillian forgot an important requirement: each bedroom needed to be occupied. Within months Lillian was evicted from her home of 30 years.

​When the sheriff's men arrived, Lillian fell to her knees and begged them to let her stay. As they pulled her away, she became aggressive and threatening and was hospitalized for psychiatric observation. Upon discharge, she was given a seven-day voucher for a Tenderloin flophouse, and when this expired, she became homeless. 

Lillian picked up her first crack pipe at age 68 and drank every day to make the pain go away. Eventually she was connected to a social worker at a public health clinic, but with resources tight and budgets shrinking, all they could offer was a temporary shelter bed, medical care and a housing application that "might come through someday."

Lillian returned to the streets, and grew so angry and hostile that few service providers would approach her. Her story is common in the U.S. among those living with chronic mental illness, entrenched poverty, and homelessness.

In 2004, by overwhelming majority, California voters passed the Mental Health Services Act, imposing a 1 percent tax on adjusted gross incomes over $1 million to transform the public mental health system. With this new revenue, voters created a vastly improved safety net for mentally ill Californians. 

Among the first services initiated were the Full Service Partnership (FSP) programs that provide wraparound services with collaborative partners. Targeting people like Lillian, long considered "too hard to reach," FSPs serve people who have often lived on the streets for years.

FSPs offer intensive, recovery-oriented treatment models that meet people "where they are." Treatment happens on the street, in hotel rooms, homeless shelters, and anywhere people in need happen to be.

Participants are offered emergency housing from day one. Mobile treatment teams, made up of mental health specialists and consumers of mental health services who are in full recovery, seek out the hardest-to-reach people and the highest users of emergency services. The teams use life experiences and clinical expertise to get people into housing and treatment. "Flexible funding" provides for basic needs like food, clothing, and shelter, while participants are connected to disability and other public benefits.

FSP teams are available 24 hours a day, have low caseloads and see participants 1-3 times a week, providing "wraparound" services that have proven most effective in treating people with chronic mental illness.

According to the Petris Center, an independent research and evaluation center at the University of California, Berkeley, since the FSPs began serving the state's neediest people, rates of homelessness, incarceration and emergency hospitalization have declined significantly. In strict economic terms, housing and treating a person with mental illness for one year costs less than emergency psychiatric inpatient treatment or a long-term stay in jail.

With this millionaires' tax, California voters have slashed costs at emergency rooms around the state, since many of the highest users are people living with mental illness and homelessness who seek hygiene, shelter and safety in the ERs. Taxing just the richest 1 percent of Californians has led to the creation of an innovative, cost-effective safety net that simultaneously reduces costs for the state and the size of the budget deficit.

Unfortunately, for others, such as low-wage workers and students, no similar millionaires' tax offsets the rising costs of health care, education and housing. And yet, the solution is clear. The Mental Health Services Act, built entirely on a 1 percent millionaires' tax, is transforming the public health system.

Today Lillian lives in a large studio in a new building with a garden and a ground floor bakery. She has taken full control of her recovery from depression and trauma.  And although Lillian's life is still full of struggle, her story shows how even the smallest of taxes on the richest 1 percent can build healthier, safer and stronger communities for Californians.

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  • thank you john-david, for your accurate and heartfelt portrayal of the poor, elderly and otherwise... good and caring citizens....the harsh reality of lost jobs, declining salaries, loss of financial resources and ability for many people to keep up with high cost of living...is staggering....i believe many people are grieving their lives, the life they may have had....for whatever reason,.... corporate raiding of jobs, political selfishness and selfinterest, or just plain bad luck..!.. important question now is where do we go from here...what can be done....who will lead the peoples recovery, of the unbridleled selfishness and greed of those responsible...

    Posted by dolly odonnell, 04/22/2012 7:54pm (3 years ago)

  • Excellent article, however, are you suggesting new taxes on millionaires? The article shows the success of what has been done with only a 1% tax. Are we showcasing this success as justification to campaign for another tax on millionaires?

    Posted by Knuckles, 04/22/2012 12:58am (3 years ago)

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