Between 1981 (See Omnibus Reconciliation Act) and 2005, state mental health spending, adjusted for inflation, grew only 0.9 percent each year. Medicaid carries the largest burden. Compared to 1955 budget of $8Billion budget, states spend roughly 12% adjusted for inflation and population growth. The recession of 2007 further reduced state funding for the mentally ill. On average, State $ has been cut by $2.2 billion that has not been made up with Federal funding. 75% of the State cuts were made from the general funds, 22% were cut from the Medicaid funding stream.
States have not been able to absorb the reductions made by the Federal gov't. Most of the state cuts have been made in the areas of institutional care and community programs and services. 53% of the states reduced compensation to community providers by 2010.
None of that has been made up with funds from the Federal gov't. With the reductions in compensation, come the reductions in the people who work in the fields of mental health resulting in fewer Psychiatrists, nurses etc.
States are expected to continue to face budget shortfalls in the area of mental health. There is no plan by the Fed's to address this in Congress or in the present administration.
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