Included in the omnibus spending bill is the FY 2004 Labor-HHS-Education Appropriations measure that encompasses funding for the National Institutes of Health (NIH) and the National Institute of Mental Health (NIMH). For FY 2004, the NIMH budget will climb to $1.39 billion -- $49.7 million above the agency’s FY 2003 level. This 3.6% boost is far below the pace of increases for the NIMH in recent years as Congress moved toward doubling the federal investment in biomedical research. NIMH’s increase is slightly below the average across the entire NIH. This results largely from the much bigger increases included for research on juvenile diabetes and AIDS (including a transfer of $150 million for the President’s global AIDS initiative). However, NIH and NIMH continue to enjoy broad bipartisan support in Congress – as demonstrated by the increases for all NIH institutes and the contrasting level funding for most other Public Health Service programs.
For FY 2004, the Mental Health Block Grant program (also known as the Performance Partnership Grant or PPG) will be level funded at $437.14 million. The Mental Health PPG – the largest program within the Center for Mental Health Services (CMHS) at SAMHSA – is a formula grant program to the states, with funding decisions largely made by state mental health planning councils. This includes $21.85 million that will be set aside for evaluation and data collection activities.
The omnibus bill does include the $7 million increase for the PATH program recommended by President Bush – boosting funding to $50 million. The PATH program is a formula grant to the states designed to increase outreach and assistance to homeless individuals with mental illness. The final bill also includes language directing CMHS to maintain current support for the Bush Administration’s efforts to end chronic homelessness. The final agreement also includes a $5 million increase for the CMHS Childrens' Mental Health program, up to $103 million. This is half of the $10 million increase requested by the President.
Other highlights of the FY 2004 CMHS budget include:
The final CMHS budget also includes two dozen congressional "earmarks," totaling more than $5 million. These earmarks direct the agency to spend specific amounts on specific projects. These include projects such as $250 million for chronic care of psychotic disorders at the Western Psychiatric Disorders Center in Pittsburgh, $100,000 for rural mental health care in Deschutes County, Oregon, $100,000 for a mental health court in Dauphin County, Pennsylvania, and $225,000 for mental health services at the Cheyenne River Sioux Tribe in South Dakota.
The final agreement also includes $100 million for the Bush Administration’s new "Access to Recovery" initiative. This program – located at SAMHSA’s Center for Substance Abuse Treatment (CSAT) – is designed to increase access to drug and alcohol treatment through a new voucher program. Individuals with substance abuse disorders would receive these vouchers and be able to seek treatment from programs that meet evidence-based standards. NAMI will be monitoring implementation of this new program to ensure that individuals with mental illness and co-occurring substance abuse disorders have access to assistance.
Finally, the FY 2004 omnibus appropriations bill does NOT include any new funding for the Mental Health Courts program at the Justice Department. This comes after Congress appropriated more than $7 million for the program in FY 2002 and 2003. This will likely prevent the Justice Department from offering a new round of funding in 2004.
The FY 2004 omnibus appropriations bill includes $28.569 billion for the Veterans Health Administration (VHA). This is a $1.57 billion increase above the President’s request and nearly $3.3 billion above the FY 2003 level. This increase was one of the most contentious issues in the final negotiations. While veterans’ medical care is very popular in Congress, the Bush Administration resisted funding above the President’s request. In the end, the increase for veterans’ medical care was accomplished only through enactment of a .59% across-the-board reduction in all non-defense discretionary programs.
The VHA budget includes funding for 172 medical centers and 876 outpatient clinics. The VHA is the largest system in the country that provides both inpatient and outpatient psychiatric care. It is estimated that 454,598 veterans have a service connected disability due to a mental illness. Of great concern to NAMI are the 130,211 veterans who are service connected for psychosis (104,593 of whom were treated in the VA for schizophrenia, according to 1999 data). The final agreement does include language recommended by the House directing the VHA to establish two new Mental Illness Research, Education and Clinic Centers (MIRECCs).
The FY 2004 omnibus spending bill contains funding for important housing programs at HUD including the McKinney-Vento Homeless Act, Section 811 supportive housing and the Section 8 rental voucher program. This includes funding to renew all expiring rent subsidies under the Shelter Plus Care program (permanent supportive housing for chronically homeless individuals with mental illness and co-occurring substance abuse disorders) and the Section 811 program (both tenant-based and project-based subsidies).
HUD Section 811 – For FY 2004, HUD Section 811 will be funded at $256.47 million. While this is slightly above last year’s level, it does include a "carryover" of $5.9 million in unspent funds – funds previously allocated by PRAC renewals (see below). This means that actual new funding available for FY 2004 will be the same as last year, $250.57 million. The Section 811 program provides funding to non-profit organizations to develop group homes and other community housing options that serve adults with severe disabilities, including severe mental illnesses. Section 811 is critical source of funding for housing for non-elderly adults with severe mental illnesses.
The FY 2004 omnibus spending bill will require HUD to limit the amount of 811 funding that can be diverted to tenant-based rental assistance, away from capital advances to non-profits and project-based rental assistance (the traditional form of 811 funding). Tenant-based assistance, also known as a voucher, provides a monthly rent subsidy to individual eligible low-income tenants, thereby allowing them to select their own housing in the community (typically without supports linked to the housing). By contrast, capital advances and project-based assistance are direct assistance to non-profit sponsors to increase the stock of affordable housing for specific populations and typically involves linking support services directly to housing.
For FY 2004, both the capital advance/project-based and tenant-based ("mainstream") sides of the Section 811 program face a continued challenge with respect to renewal of expiring rent subsidies. In both cases, these ongoing obligations to renew funding associated with units already in existence are expected to drain limited resources limited resources from the Section 811 program. For the capital advance/project-based side, HUD estimates that $8 million will be needed to renew expiring project-based rent subsidies (also known as PRACs) – which will be offset by the $5.9 million in carryover funds.
On the tenant-based "mainstream" side, HUD projects that $42.7 million will be needed in FY 2003 to renew expiring tenant-based rent subsidies that were originally funded in prior years. This is an increase of $10 million over the amount Congress allocated in FY 2003 for Section 811 tenant-based renewals. The end result is that the growing burden for renewing project-based (PRAC), and especially tenant-based rent subsidies, will continue to erode the capacity of the 811 program to continue producing new housing – both project-based and tenant-based.
McKinney-Vento Homeless Assistance – The FY 2004 omnibus spending bill includes important increases for federal homeless programs under the McKinney-Vento Homeless Assistance Act – boosting overall funding to $1.267 billion ($47 million above last year). The McKinney-Vento Homeless Assistance Act includes a range of permanent housing and service programs such as Shelter Plus Care, SHP (permanent supportive housing), Emergency Shelter Grants, Section 8 Moderate Rehab and Single Room Occupancy. Nearly all of these permanent and transitional housing programs serve currently or former homeless adults with severe mental illnesses and/or co-occurring substance abuse.
The final omnibus bill continues the requirement for a minimum 30% set-aside of overall homeless program funding for development of permanent housing serving homeless people with disabilities (the bill would also continue the 25% local match required for services). NAMI supports this policy as the most effective means of developing at least 150,000 units of permanent supportive housing and taking a major step toward ending chronic homelessness among people with severe mental illness over the next decade.
More importantly, the omnibus bill includes full funding for the cost associated with renewing all expiring rent subsidies under the Shelter Plus Care (S+C) program. S+C is a critical permanent housing resource for adults with severe mental illnesses. Many S+C (as well as permanent supported housing, SHP) projects that were begun in the 1990s are now seeking to renew these operating subsidies.
Full funding for S+C renewals, estimated to cost $194 million in FY 2004, will ensure that thousands of formerly homeless adults with severe mental illnesses will not be placed at risk of losing subsidized housing through no fault of their own.
Section 8 Vouchers – The final FY 2004 omnibus spending bill includes $19.371 billion for HUD largest program – the Section 8 rental voucher program. This is a $2.259 billion increase over FY 2003 (a 13.2% boost). However, nearly this entire amount will be needed just to the existing supply of Section 8 vouchers. These increases are due largely to escalating rents (despite the economic downturn in recent years) and difficulties experienced by HUD and local housing authorities in developing precise estimates of the number of vouchers for which renewal funding is needed.
This rapid increase in overall Section 8 funding – an increase that does not increase the number of rent subsidies – is creating enormous stress on the overall HUD budget, preventing increases for most other programs. These budgetary pressures within Section 8 also prevented Congress from accommodating President Bush’s request for $36 million for FY 2004 for new vouchers targeted to non-elderly people with disabilities (including people with severe mental illnesses). Between 1997 and 2002, Congress allocated nearly $300 million for vouchers targeted specifically to non-elderly people with disabilities who have lost, or will in the future lose, access to housing as a result of designation of assisted and public housing as "elderly only." FY 2004 will mark the second consecutive year that Congress was unable to allocate new funding for this purpose, despite the fact that housing authorities and assisted housing managers are continuing to move forward in implementing these "elderly only" policies.