The Troubled State of Mental Health Funding

States have cut mental health funding by more than $2 billion. Things may get worse this year.

Therapy Session
January’s shootings in Tucson, Ariz., sparked a national conversation about the need for better access to mental health programs. That doesn’t mean states will be able to fund them.

Over the past three years, states have cut mental health funding by more than $2 billion. Things may get worse this year. Some states will have even more difficulty balancing their books because of the absence of federal stimulus dollars.

Mental health programs that are paid for by general funds have already been cut substantially, so states will likely look for savings through Medicaid, which funds about 60 percent of state mental health services. “All governors, new and old, will be looking to pare back their Medicaid programs,” says Mike Fitzpatrick, executive director of the National Alliance on Mental Illness, a research and advocacy group.

Several governors have called for serious cuts. Nevada lawmakers are considering budget reductions as great as 30 percent. Mississippi Gov. Haley Barbour plans to spend 13 percent less on mental health than would be needed to maintain current levels of services.

In Arizona, Gov. Jan Brewer has tried to shield mental health from severe cuts, but she is no longer able to offer such protection. “Of course, everybody is appalled by the shooting, but that has not changed the budget that has been presented by the governor, which would drop 5,200 individuals out of the service delivery system,” says Ted Williams, president and CEO of the Arizona Behavioral Health Corp. and the Arizona Foundation for Behavioral Health, which serves Maricopa County.

To impose cuts through Medicaid, states will have to win waivers from the federal government, due to maintenance-of-effort requirements in last year’s federal health law. Not every governor has targeted mental health programs. During his first week in office, Iowa Gov. Terry Branstad blocked a proposal from his predecessor, Chet Culver, to eliminate 129 beds and 136 positions from the state’s four mental health institutions.

Advocates for the mentally ill say that they are less prone to violence than the general population. Still, the shootings in Tucson will prompt more discussion about early intervention and access to services, predicts Fitzpatrick.

But finding people the treatment they need will be tricky when waiting times for many programs have already spiked upward due to budget cuts. “The challenge for policymakers now, in a time when there’s less money, is how to spend smart and how to get people into services that are essential when they need them,” Fitzpatrick says.

Tina Trenkner is the Deputy Editor for She edits the Technology and Health newsletters.