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State Mental Health Cuts: The Continuing Crisis

In March, 2011, NAMI, the National Alliance on Mental Illness, released State Mental Health Cuts: A National Crisis, a report documenting deep cuts to state spending on services for children and adults living with serious mental illness.1 These cuts, which occurred between 2009 and 2011, led to significant reductions in both hospital and community services for vulnerable individuals with serious mental illness.

Today, with demand for public mental health services extremely high, especially at a time of severe economic distress, the crisis in mental health care continues.2 The impacts are felt throughout society as people go without the treatment they need.

Increasingly, emergency rooms, homeless shelters and jails are struggling with the effects of people falling through the cracks due to lack of needed mental health services and supports.

Some states, such as California, Illinois, Nevada and South Carolina, which made devastating cuts to mental health services previously, have made further cuts for fiscal year (FY) 2012, putting tens of thousands of citizens at great risk. States have cut more than $1.6 billion in general funds from their state mental health agency budgets for mental health services since FY2009, a period during which demand for such services increased significantly. These cuts translate into loss of vital services such as housing, Assertive Community Treatment, access to psychiatric medications and crisis services.

Modest increases in state general fund mental health spending fail to compensate for the loss in federal Medicaid revenues that hit states due to reductions in federal Medicaid rates implemented at the end of June 2011. Moreover, to make up for these lost federal Medicaid revenues, states such as Arizona and Ohio have shifted state general fund mental health dollars to Medicaid recipients, leaving many non-Medicaid recipients with serious mental illness without services.

The data in this report is limited to general fund appropriations for state mental health agencies (SMHAs). It does not include mental health funds that are under the control of other state agencies such as state Medicaid agencies, housing authorities, or child and family authorities. Further, state hospital or ward closures and personnel cuts may be in other departmental or agency budgets. Were all cuts affecting mental health services factored in, the sum of the total cuts would be significantly higher.



1Honberg, R., Diehl, S., Kimball, A., Gruttadaro, D., & Fitzpatrick, M. (March, 2011). State Mental Health Cuts: A National Crisis. Retrieved from >
2Depression is Real Coalition, Mental Health America, National Alliance on Mental Illness (October, 2009). Economic Downturn Taking Toll on Americans’ Mental Health. Retrieved from See also: Goodwin, J. (2011, October 21). Study: Foreclosure crisis threatening Americans’ health. USA Today. Retrieved from

Related Files

State Mental Health Cuts: The Continuing Crisis (full report) (PDF File)
Appendix I: Methodology (PDF File)
Appendix II: State Mental Health Budgets FY09-FY12 (Alpha Order) (PDF File)
Appendix III: State Mental Health Budgets FY09-FY12 (Percentage, High to Low) (PDF File)
Appendix IV: State Mental Health Budgets FY11-FY12 (Percentage, High to Low) (PDF File)
Appendix V: Per Capita State Mental Health Spending FY09 (Alpha Order)) (PDF File)
Appendix VI: Estimated Loss of Enhanced Federal Medicaid Match in FY12 (Alpha Order) (PDF File)