NAMI North Carolina

309 W. Millbrook Rd. Suite 121, Raleigh, NC 27609*919/788-0801

Heard in the Halls

May 23, 2002

On Tuesday Governor Easley released his proposed budget for fiscal year 2002-03, proud that he had increased spending on education and closed a nearly $2 billion state deficit, all without raising taxes. This miracle was accomplished through a combination of budget cuts, fund transfers, layoffs, delays in tax cuts, and a state lottery (which doesn’t exist). But the major burden falls on state agencies that were asked to shoulder over $725 million in cuts.

Hardest hit? You guessed it, programs for MH/DD/SA. In what has become an annual ritual, catastrophic cuts that will result in a loss of over $150 million to MH/DD/SA services are proposed. Programs for MH/DD/SA will shoulder 50% of the cuts to the Department of Health and Human Services and 11% of all state budget cuts. The disproportionate burden placed on persons with MH/DD/SA disabilities is an outrage.

• Nearly $39 million from Area Community Mental Health Programs. With a total of just over $323 million in state funds, this amounts to a 12% reduction. Area programs will be required to submit reduction plans to the Division of MH/DD/SA. The Governor has asked that the Division ensure that critical functions and federal and State requirements are met. It is anticipated that administrative budgets, and service budgets for patients with lower needs will be reduced or terminated. Patients with the greatest need are to have services continued.
• Reduces the Medicaid rate for case management services by 25%. For mental health that will result in a loss of up to $17 million and for CAP a loss of up to $10 million in state and federal funds.
• A $23.6 million reduction in state funding for CAP services which will result in a total loss of $73.5 million due to the corresponding loss of federal matching funds.
• Over $12 million to various substance abuse treatment and court programs.

• $1.5 million to Adult Mental Health Programs in State Psychiatric facilities (a 1% reduction).
• $247, 262 MR Facilities (1.3% reduction).
• $184,818 Substance Abuse Facilities (1.5% reduction).
• $121,262 Central Office Reductions

While Easley’s budget restores $10 million to the MH Trust Fund, the Trust Fund has actually received $25 million less than what was approved by the General Assembly last year. The Governor’s budget removes $39 million of recurring state funds from the community service system and places $10 million of non-recurring money in the Trust Fund for community services—an unfair and lousy tradeoff.

All this to a system that last year was estimated to require $736 million to meet urgent needs and that now is being asked to undergo massive system reform. By the state’s own estimates, 14,000 people will lose services if these cuts are enacted.

Governor Easley’s budget is only a starting point for the General Assembly which will return May 28^th to begin its own budget deliberations. But the leadership has stated that, like the Governor, they do not intend to raise taxes to address the state’s budget crisis but will look at budget cuts. The reason? There is a belief that the public does not want tax increases and that those at the receiving end of the cuts aren’t politically powerful and thus are relatively "safe" to take funds from.

Legislators need to hear that we have had enough! Further cuts are not acceptable, especially when there has been no serious consideration of raising revenues. Legislators need to know that we will not be taken advantage of again.