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Linn County Faces Mental Health Deficit

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CEDAR RAPIDS, Iowa -- State and federal policy changes are leaving Linn County with a $5.3 million deficit for mental health services, county supervisors learned today. The county must make immediate cuts to balance its budget, those in charge of the services warned.

"We're in a serious situation, there's no doubt," said Mechelle Dhondt, the county's director for mental health and the developmentally disabled (MHDD). "I've been here 25 years, and this is the worse I've seen."

Dhondt and Sue Novak, budget management director for Linn County Community Services, briefed supervisors on the situation at their morning work session.

The current budget projects the county will spend $37 million on MHDD services in the current fiscal year, up from $33 million in fiscal 2011, which ended last June 30.

The biggest part of the projected shortfall, about $3.25 million, is because the county's share of services funded partly by Medicaid will jump by about a third, to 38.8 percent. The county paid $10.1 million in Medicaid match payments in the last fiscal year.

Dhondt said the Iowa Legislature cut state aid to counties when federal stimulus money flowed into the system, but isn't restoring previous funding now that the stimulus had ended.

"What we assumed would happen was that that money would come back to us," she said.

The county also used $1 million from the MHDD fund balance essentially an operating surplus, Dhondt said during the last fiscal year, a move it shouldn't repeat. The current $1 million balance is about 3 percent, the level recommended by Novak.

A 2.5-percent inflation factor contributes about $732,000 to the problem.

Novak noted counties that have drawn down their balances and have carried waiting lists for services have received additional state assistance with MHDD costs.

"So what do we do?" asked Supervisor Ben Rogers, D-Cedar Rapids. "Cuts in staff, cuts in services? This is not a small problem."

"All of the above," answered Novak.

Dhondt said the county adopted a waiting list for services Sept. 1 the first time it's maintained such a list. That means the county may now tap a state "risk pool" that pays for services for those most seriously in need.

"It's very likely that anyone coming in for services after Dec. 1 is not going to get services until the end of the fiscal year" next July, Novak said.

Dhondt said MHDD staff are preparing a list of cuts for review by the county's MHDD panel at its Oct. 14 meeting.

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