Creative Funding Solutions for Mental Health Care

As we read our way through the detailed, insightful articles of The American Prospect’s special issue on the politics of mental health, we’ll share interesting tidbits from them.

Taxpayers historically hate having to pay for public services through increased taxes of any kind. Many of us believe we are taxed enough as it is, and so finding funding for things that should be available in most states — like affordable mental health care — can be challenging. In the Pete Earley article about this topic, he reviews some creative strategies for funding mental health treatment these days, and recounts this amusing story of how difficult funding for public health concerns can be:

Historically, mental-health funding has been a low political priority. In Wyatt v. Stickney, the country’s first major civil-rights battle about mental illness, attorneys sued Alabama and introduced horrific evidence that showed how patients in state asylums in the 1970s were being abused, neglected, and, in some cases, tortured. Yet, when a disgusted Alabama judge ordered the state legislature to overhaul its shameful system by pumping in millions of new tax dollars for improvements, legislators balked. They cried poor. There was no money, they insisted, until an enterprising attorney released state financial records that revealed Alabama was spending more each year to host the Alabama Junior Miss Pageant and swine shows at county fairs than it spent caring for people with mental illnesses. Red-faced legislators approved limited funds. Such legislative priorities proved typical. When choosing between new highways, more police, bigger jails, and improved schools, legislators always pushed mental-health treatment aside.

I mean, we’re talking about our government here and while we may believe this would never happen in this modern age (hey, that was over 30 years ago, right?), I have my doubts that legislatures care much more today than they did 30 years ago. After all, this kind of mental health care — like homelessness — is what other people need, not me, says the average taxpayer. Roads, police, schools — they are things virtually everyone uses.

So one of the creative funding strategies occurred in California, where they successfully passed a proposition that taxed 1% on anyone making over $1 million (what they refer to as the dot.com tax, because the dot.com boom in California produced many millionaires). Why target these rich folks? One of the reasons was because they had no organized lobby that would fight the proposition (while liquor and cigarette makers did). Since the suggestion of raising property taxes is akin to the suggestion of bathing in battery acid these days, they turned to this particular group of taxpayers to help fund mental health treatment. Naturally, it worked:

The proposal appeared on the November 2004 ballot. The publicity before the vote focused on the success of AB2034 programs. There was no opposition from the dot-com millionaires. The only organized opposition came from the Scientologists. Proposition 63 passed with 54 percent of the vote in favor and 46 percent against.

Before the election, the California Legislative Analyst’s Office had estimated that if enacted, Proposition 63 would generate $800 million yearly. But because many incomes in the upper tax brackets increased significantly during 2005, revenues from the millionaires’ tax hit an astonishing $1.3 billion.

Sadly, not every state has an economy that can churn out new millionaires as quickly as California’s does, so one must look to other means or initiatives to help fund this treatment. But the idea is important — look for creative funding sources that others haven’t yet discovered. Because such novel ideas may reap a bigger reward than trying to go through the traditional, tone-deaf legislative channels.

Read the full article: Finding Funding