Click here to read the compelling Pacific Research Institute study of expenditures on mental health in the criminal justice system.

M E M O R A N D U M

The biggest change upon people with mental illnesses is the proposed suspension of a COLA for SSI/SSP recipients.

The following update provides a summary of key mental health and health provisions of the May Revision.  As additional details become available, we will update this document.  Please check the MHAC website (www.mhac.org) for corrections and additions to this analysis as more information becomes available. 

Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Program

The May Revision includes an increase of $67.4 million ($32.1 million General Fund and $35.3 million in federal fund reimbursement) in 2007‑08. This includes the following adjustments:

• A decrease of $24.3 million ($12.2 million General Fund and $12.1 in federal fund reimbursement) due to lower than projected EPSDT claims.
  
  
• An increase of $61.6 million ($30.8 million General Fund and $30.8 million in federal fund reimbursement) to remove the cost settlement adjustment factor by which the state had been under estimating and under paying counties by 5% of claims.  Upon its review of the EPSDT estimation methodology this spring, the Office of State Audits and Evaluations (OSAE) recommended eliminating the cost settlement adjustment historically used to discount claims estimates.
  
  
• An increase of $39.9 million ($17.2 million General Fund and $22.7 million in federal fund reimbursement) for the 2004‑05 cost settlement. (Apparently only this $40 million portion of the $300 million owed for EPSDT claims is proposed to be paid as part of the 07-08 budget.  We are trying to get additional information on how and when counties and providers will be reimbursed for the remaining owed funds.)
  
  
• OSAE will conduct a review of EPSDT local assistance programs and an internal control review of the DMH’s accounting and administrative controls. Their views are expected to be completed by September 2007 and January 2008, respectively, with a DMH action plan issued in March 2008.

Mental Health Services Act - Revenue Estimates Continue to Rise!!!

While the short term financial struggles continue, the long term mental health financing picture continues to improve as revenues to the Mental Health Services Fund are projected to increase by $100 million per year above the January 2007 forecast for a total of $1.6 billion in 2006-07 and $1.8 billion in 2007-08.  Due to the way that MHSA funds work, this will increase the funds available for services in 2008-09 and 2009-10.

The Governor proposes no changes in state administration expenditures for DMH for the Mental Health Services Act.

Integrated Services for Homeless Adults Program (AB 34/2034) - NOT restored

In spite of all out lobbying, legal opinions questioning the authority and supportive legislative action and editorials, the Governor has not budged on the AB 2034 program; the May Revise budget released today did not restore line item funding this landmark program for homeless individuals living with a mental illness.  Restoring these funds will continue to be a top priority. 

Realignment

There have been no changes since the January Budget - same forecast as the January budget which provides $90 million in increases but is contingent on legislative approval of limitations on state expenses for In Home Support Services (IHSS) the program whose growth over the past 15 years has prevented mental health programs from getting their full revenue increases under this complex program.

Proposition 36 and Substance Abuse Offender Treatment Program

The 2006 Budget reauthorized $120 million in funding for Proposition 36.   Implementation of some of the changes sought by the Governor have since been suspended by judicial injunction. The Budget Act also authorized $25 million for the Substance Abuse Offender Treatment Program (OTP), intended to enhance treatment services.  However, in response to suspended reforms, the 2007‑08 Governor’s Budget proposed to reduce Proposition 36 funding by $60 million, and use this funding in the OTP program.  In light of the recent legislation regarding prison rehabilitation programs, the Administration will not propose to transfer all Proposition 36 funding to the OTP. However, the Administration continues to propose to transfer $60 million from Proposition36 to the OTP.

Forensic Conditional Release Program (CONREP)

The May Revision includes an increase of $929,000 General Fund, to increase CONREP capacity by 30 beds.

AB 3632 - Mental Health Services to Special Education Students

The Governor’s May Revised Budget proposes no changes to the AB 3632 program since the January budget – it includes $52 million for the remaining estimated costs for the AB 3632 program. This $52 million, in addition to the funds provided in the 2006 Budget Act, will fund the estimated costs of the 2006-07 fiscal year.  For 2007-08 the budget appropriates $69 million in federal special education funds and $66 million is included for years 2006-07. 
                                   
Supplemental Security Income/State Supplementary Payment (SSI/SSP) - SUSPENSION

The May Revision proposes to suspend the January 2008 state COLA in the SSI/SSP program.  Monthly grant payment levels will then be $863 for aged or disabled individuals and $1,514 for aged or disabled couples.  This is the most significant negative feature of the Governor's May Revision affecting people with mental illnesses. 

Early Mental Health Initiative Program (EMHI)

The Governor's May Revised Budget includes no changes to the Early Mental Health Initiative from the January proposal.  The budget includes a $5 million increase in Proposition 98 General Fund to augment the Early Mental Health Initiative (EMHI), which provides grants to local education agencies for supportive, non-clinical mental health intervention and prevention services to children (grades K-3) who have mild or moderate school adjustment difficulties.

Mental Health Managed Care Program

The May Revision includes a decrease of $1.9 million ($926,000 General Fund and $926,000 in federal fund reimbursement from the Department of Health Services), primarily due to a decrease in the number of Medi‑Cal eligibles receiving psychiatric inpatient hospital services and specialty mental health professional services.

Salary Enhancements and Recruitment for Mental Health Professionals 

The May Revision includes an increase of $286,000 ($167,000 General Fund and $119,000 reimbursements) to fund salary increases ranging from 66 to 74 percent for psychiatrists and senior psychologists and salary increases ranging from 10 to 40 percent for all other impacted mental health classifications. Budget Bill language also is proposed to allow increased funding if recruitment efforts exceed the proposed staffing plan and other parts of the May Revision include $1 million to contract with a professional "headhunter" to assist the state in recruiting various types of health professionals including mental health staff for state hospitals and prisons.