Budget panel weighs $10 million-plus to keep mental health transitional living homes open

The Joint Budget Committee on Thursday debated whether to add more general fund support to keep state-contracted mental health transitional living homes operating as one-time ARPA dollars that had propped them up run out.

Emily Pope, JBC staff, told the committee the department expects about $3.9 million in general fund-equivalent Medicaid revenues from HCPCS and roughly $1.4 million in additional patient revenues from Medicare and private insurance for the coming budget year. She said contracted beds are slated to drop from 164 this year to 125 when ARPA funding ends, the statutorily required minimum.

Senator Mobley pressed the panel to fund the beds, saying the homes are already full and urging the committee to avoid shifting people into costly hospital or correctional placements. "The cost of not having this robust step down is much higher than the cost of having it," Mobley said, arguing that beds free up higher-cost state hospital capacity and reduce competency wait-list fines.

Pope and other staff cautioned that the department has not requested additional spending authority for the beds and that many details remain uncertain. "They do not think that they need additional spending authority," Pope said of the department's position on spending authority tied to patient revenues. Staff recommended accounting for anticipated patient revenues as an authority adjustment but advised taking no additional appropriation action until OSPB provides more complete comebacks next week.

Committee members asked for clearer figures on per-bed costs and vacancy rates. Staff said fully funding the beds across the system would be about $22 million in general fund, up from a current $17 million appropriation; staff later clarified that would represent about a $10 million general fund increase once all offsets are considered. Members also flagged staffing shortages: the department reported a high vacancy rate for FTE in these facilities, with 26.9 of 53 FTE currently vacant in one line, contributing to uncertainty about the feasibility of scaling capacity quickly.

The committee ultimately moved to adopt a staff recommendation on patient-revenue authority (page 3 of the packet) to align spending authority with the department's estimates, a motion that passed on a 5-0 vote with one member excused; it did not commit the additional general fund needed to fully annualize all transitional beds pending more information from OSPB. The committee also discussed a separate $20 million placeholder that OSPB requested for competency-related placements and signaled it would consider that placeholder but requested more detail before finalizing such a commitment.

The committee said it would return to the issue once OSPB submits its detailed comebacks next week, and staff will provide a fuller accounting of the Medicaid match potential, vacancy-driven operational constraints, and per-bed cost estimates.