Serious problems facing Community Mental Health system in Michigan

On January 13, 2010, the CMH Boards under the Community Mental Health Partnership of Southeastern Michigan met to hear very bad news about Michigan's funding of mental health agencies. Because of the state's deflationary spiral downward and drastically reduced revenues, all local Community Mental Health agencies can expect unprecedented cuts in funds from the state.

The four CMH boards from Washtenaw, Lenawee, Livingston, and Monroe Counties braced themselves for the beginning of the 2011 budget negotiations which start in February when the Governor delivers her budget proposals to the state legislature. The meeting began with a sobering state budget overview and a presentation on finance basics and the impact of the crisis on the state's General Fund and Medicaid funding.

I am no expert on state finances, but this sure sounded bad to me:

• The current recession at 22 months ("peak to trough") is the longest since the Great Depression.
• Leading indicators point to an imminent national recovery, but Michigan has been in a longer and deeper decline than other states.
• Auto sales are going up again, but the Big Three market share has dropped from around 70% of the market in the early 1990's to 35% of the market now. (Nationally, fewer people today work in manufacturing jobs than did in 1941.) Michigan Vehicle employment dropped 78% from 2000 to 2010. Overall, 1 million jobs have been lost since 2000. The forecast for 2010 is a Michigan unemployment rate of 15.3%.
• In good times, Michigan's personal income relative to the U.S. was 122%. We have fallen to 87% of the national average.
• States revenues in the General Fund for 2010 are equal to the General Fund level of 1965, when adjusted for inflation. All the rumors about how our taxes keep going up are not exactly true: Michigan taxes as a percent of personal income have declined since 2000.

After significant cuts in spending for the 2010 fiscal year, the state has told all agencies that they must submit program reduction proposals for fiscal year 2011 equal to 20% of their General Fund appropriation and the Department of Community Health also wants agencies to submit proposals for 20% reductions in Medicaid spending. (This is especially troublesome, because Medicaid pays for most of the specialty services for people with developmental disabilities.)

If the threatened cuts were to be fully implemented, Washtenaw County would have to cut $1.9 million from its General Fund authorization. Even though Medicaid-enrolled consumers are entitled to needed services, Medicaid funds would be cut by $8.8 million.

The four-county affilliation that includes Washtenaw County is developing a strategy to make sure that the CMH Partnership of Southeastern Michigan takes a leadership role in influencing how the state will respond to this crisis. They have been disappointed in the past by the lack of leadership from their state association (the MACMHB) and plan to take more direct action.

From the discussion this week, it appears likely that the short-term strategy to get us through the next 18 months will be to push for an expansion of Medicaid and tap into other sources of federal funding while developing a long-term strategy for remaking the community mental health system. If the healthcare reform legislation makes it through Congress, it will open possibilities for funding through numerous demonstration projects. The affiliation, rather than focusing solely on the money, will focus on changing the system and serving consumers.