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February 15, 2010
As is being widely reported in the press, the President released a proposed $3.7 trillion federal budget for FY 2012 highlighted by a proposed overall freeze for most non-defense, non-veterans discretionary spending. Despite these overall tight constraints on domestic discretionary spending levels, the budget proposal does include some important (though modest) increases for mental illness research, services and supportive housing programs. In addition, funding for veterans health care is proposed for a sizable increase for FY 2012, reflecting the growing demand on the Department of Veterans Affairs.
Included below are details of the President’s FY 2012 budget. It is important to note that comparisons are to the FY 2010 budget as Congress and the Administration have yet to agree on final FY 2011 funding levels.
The President’s budget is seeking a $27 million increase for the National Institute of Mental Health (NIMH), boosting FY 2012 funding to $1.517 billion above the FY 2010 level. While this is only a proposed 1.8% increase, it takes place against a backdrop of an overall freeze on most domestic discretionary spending. Nonetheless, this amount is still below the biomedical research inflation rate that is usually around 3.5% -- in other words, the purchasing power of NIMH funding is likely to continue to erode under tight fiscal constraints. Moreover, the proposed increase for NIMH is slightly below the overall requested increases across most of the other institutes and centers at the NIH, where the President’s overall $31.987 billion request is $745 million above FY 2010 (a 2.3% increase).
In an unexpected development, the President’s budget requests a $14 million increase for the Mental Health Block Grant – boosting funding to $435 million for FY 2012. This is the first proposed increase for the Block Grant program since 2000. However, it is important to note that this request for an additional $14 million for the program is NOT intended to be passed through to state mental health agencies for direct services. This increase (along with the $40 million requested increase for the Substance Abuse Prevention and Treatment Block Grant) is needed to make up for a requested transfer of funds out of the block grant program for Public Health Service (PHS) data evaluation. The funds transferred out of the block grant would be used to cover data infrastructure improvements and evaluation across PHS programs such as HRSA and SAMHSA. The net effect is that funding for the Mental Health Block Grant would be level funded in the President’s budget at $421 million.
Overall, SAMHSA’s current $3.583 billion budget would see a $67 million increase for FY 2012 – a pleasant surprise in an otherwise tight fiscal environment. Within these totals are proposals to freeze a number of programs at their current FY 2010 level, including the PATH program (outreach and engagement for homeless individuals with mental illness) at $64 million and the Childrens Mental Health program at $121 million.
At the same time, the budget does make room for a number of new priorities including a $90 million request for Project LAUNCH, a $65 million increase for FY 2012. Project LAUNCH is a competitive grant program for states to invest in evidence-based prevention and promotion efforts. The budget also seeks $10 million in new funds for a “Military Families Initiative,” including $3.5 million for Policy Academies and $6.5 million for direct services.
In order to accommodate these targeted increases, the budget proposes a series of targeted reductions in discretionary programs at SAMHSA and the Center for Mental Health Services (CMHS) under Programs of Regional and National Significance (PRNS) – renamed “Innovation and Emerging Issues.” Among the proposed reductions are grants to states for Mental Health Transformation (cut from $29 million, down to $10.6 million) and grants to states for trauma services (cut from $40.8 million down to $11.3 million). Most other CMHS priorities under PRNS continue at their current levels including:
• Primary & Behavioral Health Integration Grants - $14 million
• Garrett Lee Smith Suicide Preventon Grants - $34.7 million
• Criminal Justice Grants - $6.68 million
• Homeless Prevention Grants – boosted to $39.7 million
The President’s budget requests $196 million for the HUD Section 811 program for FY 2012. This is in contrast to the President’s budget proposal last year that sought a deep cut to the program. Section 811 funds capital advance grants to non-profit groups for construction or rehabilitation of supportive housing for people with significant disabilities, including serious mental illness. The capital funds are accompanied by project-based subsidies to defray operating costs (utilities, insurance, etc.) in a way that makes rents affordable for individuals living on SSI.
A new law passed at the end of 2010 – known as the Frank Melville Supportive Housing Investment Act – will create more flexibility for non-profit sponsors, allowing them to attract alternative sources of financing to make the limited capital funds in Section 811 stretch further and more effectively target units to people currently seeking to leave nursing homes, substandard housing (e.g., unlicensed board and care homes) or experiencing chronic homelessness.
With this new law on the books, the $196 million requested for 811 should allow more new units in FY 2012. This $196 million request is comparable to the current FY 2010 level of $300 million. How? The President’s budget seeks to shift $114 million in funding for renewal of 811 “mainstream” tenant-based rental vouchers to the much larger Section 8 program, thereby removing a large and growing burden on the program. HUD projects that this $196 million funding level will allow for a $111 million allocation for new capital advance grants for FY 2012, more than the current FY 2010 competition. HUD projects that $85 million will be needed in FY 2012 to renew 19,107 expiring project-based operating subsidies (known as PRACs).
For McKinney-Vento Homeless Assistance Grants, the President’s budget proposes $2.37 billion for FY 2012. This includes $286 million for Emergency Solutions Grants and $2.016 billion for competitive grants through the “Continuum of Care” process. The budget also requests an additional $75 million for rental vouchers for the joint HUD-VA VASH program – supportive housing and services for homeless veterans (funding ten thousand new vouchers). Finally, HUD is also requesting $56.9 million for a joint HUD-HHS initiative for to assist both homeless families and chronically homeless individuals. This would fund as many as 7,500 rental vouchers, to go along with services provided by HHS, including SAMHSA.
Funding levels at the Department of Veterans Affairs is largely exempt from the President’s proposal to freeze most domestic discretionary spending. As a result, the VA will again see substantial increases for most of its programs, including more than $70 billion in mandatory programs such as disability benefits and $59.3 billion for the Veterans Health Administration.
It is important to note that most of VA’s programs – including VA medical care – now operate on an “advance appropriation” budget cycle designed to keep the agency one year ahead of Congress, in order to avoid having delays in passing an annual appropriation for the agency disrupting funding. As a result, the FY 2012 allocation for veterans’ medical care ($50.61 billion) was already put in place last year through an advance appropriation. The budget released today seeks to augment that total with a $953 million request for a contingency fund and a proposed pay freeze that will reduce the advance appropriation by $713 million. This will allow the VA medical care system to serve 6.2 million veterans, a 1.4% increase over 2011. The budget released today also includes an advance appropriations request for FY 2013 of $52.5 billion for veterans’ medical care.
For mental health treatment in the VA, the budget projects $6.03 billion for FY 2012, a $326 million increase over FY 2011. The projected FY 2013 advance appropriation for mental health treatment is $6.45 billion, or an additional $421 million. VA mental health treatment is projected to receive $124 million of the proposed $953 million contingency fund.
For FY 2012, the VA projects the following breakout of specific mental health services for veterans:
• Inpatient psychiatric - $1.679 billion
• Psychiatric residential rehabilitation - $261.2 million
• VA domicilary rehabilitation treatment - $606.5 million
• Outpatient mental health services $3.606 billion
The President’s budget also requests $320 million for FY 2012 and $460 million for FY 2013 for the agency for homeless initiatives as part of Secretary Eric Shinseki’s plans to end homelessness among veterans in 5 years. This includes funding for the VA portion of VASH program ($201.5 million for FY 2012 for case management services) and $224 million for the grant and per diem program.
The President’s budget requests $509 million for the medical research at the VA for FY 2012, a $72 decrease below the FY 2010 comparable level. VA medical research does not operate under a two-year advanced appropriations cycle as VA medical does.
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