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States' Mental Health Budgets Fall In Recession

Mar 09, 2011

In the days following the shooting of Rep. Gabrielle Giffords in Tucson, there was close scrutiny of the inadequacies of the nation's mental health system. Worrying that the spotlight has already faded, the National Alliance on Mental Illness, a grassroots advocacy group examined recent state budget cuts and found that from 2009-2011, states cut $1.8 billion or about 8 percent, from their total state mental health budgets.

That's compromising an already frayed system, according to NAMI's new report out today, based on state budget documents. (Read the report here.)

That's at the same time that demand for community-based services is actually going up in most states, according to the National Association of State Mental Health Program Directors (NASMHPD).

States Making Biggest Cuts To Mental Health

Here are the 10 states making the biggest percentage cuts to their mental health budgets:

  • Kentucky 47.5%
  • Alaska 35%
  • South Carolina 22.7%
  • Arizona 22.7%
  • Wisconsin 22.4%
  • Nevada 17.3%
  • Kansas 16.4%
  • California 16.3%
  • Illinois 15.1%
  • Mississippi 14.7%

Washington D.C. also was high on the list, with a 19.1 percent cut.

Source: National Alliance on Mental Illness

States have already or have planned to cut 3,930 state psychiatric beds since 2010, which represents over 8 percent of total bed capacity, according to NASMHPD Research Institute data. And NAMI executive director Michael Fitzpatrick says the latest cuts — affecting emergency and long-term hospital treatment, mental health case workers and crisis teams — only make things much worse: "People end up involved in the criminal justice system, living in homeless shelters and going to the emergency room."

Thirty-two states and the District of Columbia have cut their mental health budgets since 2009. The budget ax in Kentucky was the most severe, cutting 47.5 percent of their budget. Alaska was second at 35 percent.

States are undoubtedly in a no-win situation, as they face daunting multi-billion dollar budget shortfalls and are still struggling with the effects of the recession. The choice often comes down to health care, education and other essential government funded programs.

"States are making budget cuts across the board, and few areas are exempt," says Stacey Mazer, senior staff associate at The National Association of State Budget Officers. "If anything, due to the financial aid from the Recovery Act funds, education and Medicaid tend to be areas that are cut last after" other government functions, such as administrative services, accounting and parks.

Kevin Martone, president of NASMHPD, however, explains that "because mental health services have traditionally been paid for out of state general revenues, the impact of the downturn in the economy has been more devastating on these services than to other safety net services for general healthcare." State general funds, which are administered by state mental health authorities, represent 40 percent of total state support for mental health services. Medicaid, the joint federal-state health insurance program for low income people, makes up another 46 percent.

Martone adds that while "other safety net health providers such as community health centers received infusions of federal stimulus dollars that mental health did not receive while the demand for services increased."

Now, Medicaid services are due to be on the chopping block as well in many states. Medicaid received a temporary increase in federal funding from the stimulus package, which has helped to fill a growing hole in many state budgets. But that extra funding is set to expire on June 30. Mental health budgets are particularly vulnerable in the next budget cycle, because many of the services are technically "optional" benefits under federal Medicaid rules and can therefore be cut.

NAMI's Fitzpatrick points to the Giffords tragedy and the aftermath of the 2007 shooting at Virginia Tech, which killed 32 people, and says that, after all the attention, the nation "walks away."

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