Program for mentally ill eliminated

The impasse lifted Tuesday after Senate Republicans ended their blockade. They won few concessions, except a promise from the governor to veto $700 million from the general fund in an effort to address the state's operating deficit.

Schwarzenegger delivered Friday, citing the state's need to establish a "prudent reserve," then signing the $145.5-billion budget -- more than seven weeks past the state's July 1 deadline.

Among the cuts: $1.3 million to track hospital efforts to eliminate infections, which kill more than 7,000 Californians a year; $30 million for state parks; and $6 million to compel drug manufacturers to discount medicines for lower-income people.

Schwarzenegger ordered state health officials to find more than $6 million in other parts of the budget to keep the drug program alive, but the cuts will delay the website the state was going to set up to tell consumers which discounts were available.

He also struck a $17.4-million plan to protect senior citizens.

The overhaul of the state's conservatorship system was approved last year after an investigation in The Times that detailed how a system intended to protect seniors was plagued with fraud and abuse.

At the time, top Schwarzenegger officials said the overhaul demonstrated his determination to protect the elderly. Assemblyman Dave Jones (D-Sacramento), who championed the reform effort, said the money was "critical to preventing horrendous abuses of our most frail and vulnerable seniors."

None of the cuts, however, elicited a more vehement outcry than the elimination of the program for the homeless mentally ill.

The program had been on the chopping block all summer. Advocates, including the architects of California's effort to overhaul the state's troubled mental health system, had staged a furious lobbying effort to stave off the cut.

But in justifying it, Department of Finance spokesman H.D. Palmer said local governments should step in instead. "We believe if these programs are a priority to counties, they have resources available to them to provide funding," he said.

Counties across the state, however, are facing the slow erosion of their traditional mental health budgets. State Sen. Darrell Steinberg (D-Sacramento), who created the just-eliminated program in 1999, called the cut "unconscionable."

He noted that despite the allegedly strapped conditions of the state, legislators managed to preserve a tax break for some purchasers of yachts, planes and recreational vehicles -- a measure that could cost the state as much as $45 million.

"A $45-million tax break for yacht owners stays in the budget," Steinberg said. "And a nationally recognized, incredibly effective program to end homelessness for those living with mental illness gets thrown under the bus."

The program served as the blueprint for Proposition 63, the 1% "millionaires' tax" established to overhaul the mental health system. It is known as Integrated Services for Homeless Adults With Serious Mental Illness, or AB 2034, after the bill that created it.

Built to expand services beyond traditional outpatient care, the program incorporates job training, housing assistance, even, at times, grocery-buying skills and dental care. Schwarzenegger praised the program three years ago for creating "significant savings at the local level."

It has served 13,000 people since November 1999. There are about 4,700 participants today. Among those enrolled as of January, there were 81% fewer days of incarceration, 65% fewer days of psychiatric hospitalization and 76% fewer days of homelessness compared with their pre-enrollment days.

Rusty Selix, executive director of the California Council of Community Mental Health Agencies -- like Steinberg, a Proposition 63 coauthor -- said the cost of incarceration can be six times higher than the cost of enrolling someone in the mental health program.

"Rehabilitation costs money. But it's worth it," said Adrienne Sheff, director of adult services at the San Fernando Valley Community Mental Health Center in Van Nuys. Los Angeles County receives nearly a third of the state funds through AB 2034 and serves 1,700 people.