Governor proposes record cuts in budget

JEFFERSON CITY, Mo. -- Gov. Bob Holden has proposed budget reductions totaling more than $100 million for programs in the Department of Mental Health. The executive downsizing for the state's mental health provider, submitted Jan. 23 to the General Assembly, represents the largest reductions ever made in a state agency's annual appropriations.

Mental health officials say the Holden budget would not only eliminate many agency programs, but terminate several federally funded assistance projects that require state matching funds. The most severe reductions are in alcohol and drug abuse programs, community psychiatric services as well as many projects to assist the mentally retarded and developmentally disabled.

Holden's reductions are simply a response to lower-than-expected general revenue collections, said Mark Reading, the state's deputy budget director. The requested cuts attempt to reduce high administrative costs in the department, he said.

Cuts are inevitable, Reading said, because the upcoming fiscal year 2003 is expected to be the first since 1982 in which general revenue collections have declined.

Comparing budgets

The department's total spending for the fiscal year beginning July 1, as outlined in the Holden budget, is $590.5 million -- $107.8 million less than was allocated the agency in the current FY 2002 budget.

As for the number of employees, the budget will fund 2,787 fewer workers.

The largest reduction among the agency's three divisions would be in psychiatric services, which would lose $40.4 million. Funding for department-wide expenses and medical systems would be reduced by $15.9 million.

Community mental health services throughout the state are slated for reductions totaling $6.6 million in federal funds. This would eliminate services to 4,009 people.

Reductions in programs for the treatment of alcoholism and drug abuse would create further losses of federal money. An additional $15.8 million in Missouri's federal grant for Substance Abuse Prevention and Treatment would be lost. This reduction represents 52 percent of the agency's alcohol and drug funding and 32 percent of the funding for prevention services.

Seventy-three percent of current alcohol and drug clients would not receive services as a result of the proposed cuts.

This division currently funds 80 percent of all substance abuse treatment services in Missouri, and closure will mean the loss of services to drug court clients and multiple foreclosure for contracted agencies that depend on the state for funding of alcohol and drug treatment.

Equally discouraging to mental health administrators are proposed reductions in programs for the developmentally disabled. Reducing money for community programs for these groups will eliminate the agency's ability to provide a safety net for non-Medicaid-eligible patients and families caring for disabled children at home.

Money in reserve

Although some of these budget reductions may be avoided through appropriations from budget reserves, also called the rainy day fund, this method has been criticized by some members of both legislative chambers.

Even if the reserve fund is tapped to restore appropriations, mental health officials say the agency will still lose $33 million as a result of money required for new and expanded state programs and a failure by the state to meet certain federal grant requirements.

No other state department has been faced with such major cuts, and many agencies have received increased appropriations in the Holden spending plan. Those departments receiving at least a $5 million spending boost for FY 2003 include Elementary and Secondary Education, Revenue, Labor and Industrial Relations, Public Safety, Corrections and Health, as well as salaries for statewide elected officials, excluding the General Assembly, and two of the state's three capital improvement funds.