The Tennessee Departments of Health and Mental Health & Substance Abuse Services were among the agencies making presentations on the first day of Tennessee Gov. Bill Haslam’s budget hearings Monday for fiscal year 2015-2016.
John Dreyzehner, the state Health commissioner, presented a budget of $580 million for his “primarily” federally funded department. His proposal included $237 million in federal funding, $161 million from department revenue and non-federal grants and $182 million from the state.
The proposed budget reflects a cut of about $9.85 million from last year’s budget. Those savings are spread across the department, with the biggest — $5 million — coming from expanded third-party billing and fee increases for newborn screenings, vital records and general environmental health assessments.
The newborn screenings fee, which hasn’t been updated since 2008, will increase from $75 to $125. The increase will help the program be self-supporting, allow the inclusion of two new tests, help to create a state-wide courier system and allow the department to expand to six-day-a-week testing, Dreyzehner said. The fee for vital records — which include birth, death, marriage and divorce certificates — would increase to $15, which will bring Tennessee in line with surrounding states. The last time this fee was changed was 2002.
Additionally, Dreyzehner said the department could save money through $2.1 million in contract reductions. Safety net funds — grant money going to community indigent care providers — would be about $1.8 million of that reduction, with several smaller reductions to other programs making up the rest. The department has enough reserve funds to continue funding the community groups at current levels through 2016, he said.
Dreyzehner said other proposed budgetary savings come from reductions in operational costs and various reductions in smaller programs that generally receive federal dollars or should otherwise be able to “absorb” the loss of funds.
The Health Department’s budget also came with $11.9 million in increases, $7.6 million of which is intended for the general fund, Dreyzehner said. The proposed fee increases are expected to cover $3.7 million of the overall increase.
Since Haslam took over as governor, the department has cut 130 full-time positions across the state without seriously diminishing service, Dreyzehner said.
Douglas Varney, MHSAS commissioner, also touted his department’s ability to provide quality services despite cuts over the years.
The Department of MHSAS provides 250,000-300,000 “unduplicated” people with public mental health and substance abuse services, for which it contracts with more than 200 private, non-profit community agencies around the state, Varney said. Since fiscal year 2010-11, the department has been reduced by about 770 positions.
The use of community and faith-based organizations, which carry out the department’s mission better than state-run agencies would, helps to keep the state hospital costs down, Varney said.
The department also licenses 1,420 various agencies across the state, and runs four regional mental health institutes, that serve an average of 9,200 new people a year.
Varney proposed a budget of $314 million, with $132 million going to the regional mental health institutes and $162 million going to the community agencies — $100 million for mental health and $62 million for substance abuse. Only six percent is budgeted to administration costs, which Varney said he was “really proud of.”
Of that budget, $62 million is federal funds, $196 million is from the state and $47 million is from third-party payments.
Varney said the choice in reducing his budget was between cutting direct services or support services, and he had to make the “logical” choice. As such, the commissioner said the $8.1 million in cuts for his department were not across the board, and instead several smaller support programs, which didn’t serve as many people, were being offered up for the chopping block.
Funding for the state hospitals was not included in the reductions due to existing staffing issues, Varney added.
The budget request also includes about $600,000 in cost increases, with the primary goal of funding a community coaching program to get more support for community organizations, as well as to provide funding for a mental health family support program. The program would cover housing subsidies and other “inexpensive, kind of wrap-around things that helps keep the family together,” Varney said.
Additionally, Varney said the department is “aggressively” going after federal grants related to suicide prevention, veteran reentry programs and early treatment of first-onset major mental illnesses in young people.
Varney noted during the hearing that with its current operating budget, the department helps offset the cost to the state in substance abuse related incarceration and health care costs by about $340 million, in mental health prevention by about $45 million, and in crisis services by about $53 million.
The hearings will resume Tuesday, Dec. 2, and continue through Friday.
In September, Haslam notified the state agencies that he would like to see budget proposals this year that reflected a 7 percent decrease from the previous year. However, he assured those present at the hearings that proposed reductions didn’t mean certain cuts.