Even as the state braces for another tight budget year, Gov. Bev Perdue and legislators appear ready to stitch up one area of recent cuts deemed too deep and painful.
In the governor's proposed $19.1 billion budget, released Tuesday, she is recommending restoring $40 million for community mental-health programs that was eliminated last year.
The proposal also includes $12 million for the state to buy more local private-hospital beds for mental-health patients who require short-term care.
The legislature, which will begin its session next month, will consider her plan as it works to approve a final state budget.
Forsyth County officials expressed relief that they would not be asked to absorb some administrative costs from CenterPoint Human Services, the local management agency for behavioral-health services. The N.C. Department of Health and Human Services had proposed that transfer of expenses as part of its budget cuts.
Eliminating the $40 million last year drew widespread criticism from behavioral-health officials and advocates. They said that the cuts reduced the ability of patients to get preventive assistance and care through traditional providers, leaving them to either go to emergency rooms or go without help.
Perdue said that restoring the money is part of "preserving the safety net for those citizens who are most vulnerable in these economic times."
Chrissy Pearson, a spokeswoman for the governor, said that Perdue also "recognized the need for stability and security in the system, and by finding efficiencies in other places she was able to shift funds to areas of greater need."
Chris Fitzsimon, the director of N.C. Policy Watch, said that restoring the $40 million is legislators' acknowledgement that they made a mistake in removing it.
"I would be surprised if there were much opposition to this step," Fitzsimon said. "The money for the short-term-care beds is another acknowledgement to addressing an ongoing problem."
Betty Taylor, the director of CenterPoint, said that the agency is "deeply grateful" for the restored funding and the additional money for in-patient care.
"During these economic times of expanding need, the dollars are even more precious," Taylor said.
That money is being restored for mental-health services statewide "is nothing short of remarkable," said Pamela Corbett, a local psychologist and advocate.
"This is the first time I can remember seeing funds reverse direction when it comes to mental health, or Raleigh acknowledging what's happening at the county level," Corbett said.
The budget gives the Project CARE program an additional $1 million, which is expected to provide 500 more families with respite-care services for loved ones with dementia. About $535,000 was set aside for training of direct-care staff to improve care in state mental-health facilities.
The state projects that Medicaid expenditures will increase by $430 million in the 2010-11 fiscal year in response to rising caseloads and costs.
"When federal Medicaid stimulus funds run out in 2011-12, additional state funds to hold Medicaid services constant will exceed $1.1 billion," Perdue said.
"In order to begin closing this long-term gap, my budget makes targeted Medicaid reductions through enhanced fraud and utilization management efforts while protecting core direct health-care services as much as possible," she said.
It is unclear how much of CenterPoint's administrative costs would have been taken over by the county if the state agency's cost-transfer proposal had been enacted.
Dudley Watts, the county manger, said that the decision represents good news "as the revenue situation in Forsyth mirrors the state's."
"Regarding county oversight, a state statute prevents counties from reducing local funding," Watts said. "The only exception that I am aware of is for across-the-board cuts -- which we did several years ago."
Leza Wainwright, the director of the N.C. Division of Mental-Health Services, said that the money for the Local Management Entities is in its budget.
rcraver@wsjournal.com
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