Since 2009, when the economic crisis went into full force, states have cumulatively cut $1.8 billion in state general funding of mental health services, according to a review of budget documents from all 50 states and the District of Columbia by the National Alliance on Mental Illness (NAMI). The largest cuts in terms of percentage of state general funds for mental health were found in Alaska, 35%, and South Carolina and Arizona, 23% each. In dollar amounts, California led with cuts exceeding $587 million, followed by New York, which reduced state funds by $132 million, and Illinois, which cut more than $108 million. The NAMI report projects even deeper cuts for 2012.

The substantial cuts have occurred as demand for public mental health services is increasing, driven by unemployment and loss of private insurance, the NAMI report notes. Also, states may soon lose more than $87 billion in additional federal Medicaid funds if the temporary increase in the federal match that was provided in the stimulus package ends as scheduled on June 30, 2011. This will mean losses to the states ranging from $22 million in North Dakota to nearly $1.9 billion in California and $1.4 billion in New York, according to the report. The two largest sources of state support for mental health services are Medicaid (46%) and state general funds (40%).

Cuts of this magnitude mean that tens of thousands of people will be unable to access care. The report cites research showing that even before the recession, more than half of people living with serious mental illness had not received services in the previous year. Ohio is cited as an example of a state in crisis: "Ohio once had one of the top mental health systems in the country. Today, after several years of significant budget cuts, thousands of youth and adults living with serious mental illness are unable to access care in the community and are ending up either on the streets or in far more expensive settings, such as hospitals and jails." In Rhode Island, where mental health funds have been cut every year since 2008, state officials have seen a 65% increase in the number of children with mental illness who are boarding in public hospital emergency rooms, with no place to go for treatment.

In the early years of the recession, states responded to the budget reductions by laying off state office personnel and curtailing staff hours and other administrative expenses, the NAMI report notes. However, recent cuts have focused on the elimination or downsizing of programs, services, and the professional workforce (psychiatrists, psychologists, and social workers) and on limiting service eligibility. Essential services that have been eliminated or downsized in 2010 and 2011 include state acute and long-term hospitalization; crisis intervention teams and crisis stabilization programs; targeted, intensive case management services; supportive housing; and access to psychiatric medications. For example, Arizona has eliminated case management, brand-name medications, access to support groups, and housing and transportation subsidies for all residents with serious mental illness.

Police officers and judges have become vocal critics of the budget cuts because of the increased burden on law enforcement. The report notes that in Oklahoma calls to police involving psychiatric emergencies have risen by 50%, and an Oklahoma police official describes one aspect of the added burden: "Officers are traveling from one end of the state to the other and are out of their departments six, eight, ten hours at a time" to try to find psychiatric beds for people who need them. In July 2010 a judge in Sacramento County, California, blocked the county from balancing the budget by cutting mental health services to thousands of individuals, warning that the cuts would cause "catastrophic harm" and violate the Americans With Disabilities Act, leading to potentially high litigation costs for the county.

The report recognizes four states for "holding the line" either by including targeted increases for mental health services or minimizing proposed cuts. In Georgia the governor's budget for 2012 includes a proposed increase of more than $35 million in general fund dollars for expanding community-based services, such as supportive housing, assertive community treatment, and crisis services. The 2012 budget recommended by the governor of North Carolina includes a $75 million increase to expand local inpatient beds and housing programs and to fund care coordination for people with serious mental illness. Although the Oklahoma governor's 2012 budget proposes cuts to all state agencies, the cuts are lower for agencies delivering health and human services and education. The Maryland legislature is considering a "dime a drink " tax increase on the sale of alcoholic beverages, with proceeds going to fund safety-net services.

The report makes five policy recommendations to states. Protect state mental health funding and restore budgets, but tie funding to performance. Maintain adequate numbers of inpatient beds for psychiatric treatment. Invest in research on early detection and intervention in the treatment of serious mental illness for youths and adults. Implement mental health screening and assessment programs. Support programs designed to educate families, peers, and the public about serious mental illness and how to respond to people living with mental illness.

The 22-page NAMI report, State Mental Health Cuts: A National Crisis, is available at www.nami.org/template.cfm?section=state_budget_cuts_report.