Counties Win Battle to Reallot State Mental Hospital Funds : Health: A judge rules the current system is inequitable. Community programs are not affected.

SAN DIEGO —  Seven California counties, including three in the southern part of the state, have won a landmark victory in a court fight for their proportionate share of the state’s hospital beds for the mentally ill.

Calling the existing system irrational and unconstitutional, San Diego Superior Court Judge Patricia Gamer ordered the state Department of Mental Health to equalize counties’ bed allocations over the next three years.

She also ordered the state to repay counties that, since 1985, have been financially penalized when they exceeded their bed allocations. For San Diego County, for example, the repayment amounts to about $3 million.

But Gamer refused to rule against the state’s existing system of allocating funds for community mental health programs. State funding is not equitable among counties, but the state is moving slowly and rationally toward equity, she said.

This part of her decision removed the threat that as much as $15 million a year might be reallocated from counties such as Los Angeles and San Francisco, two of the nine counties that intervened on the state’s side in the suit.

The inequities the counties are challenging are an artifact of the state’s funding system for mental health over the last three decades.

When Proposition 13 took effect in 1978, counties that had liberally used state and federal grants for mental health had those funds considered as part of their base funding allocations. San Diego and smaller counties, which had refused such funds, did not. Similarly, counties that had liberally used state hospital beds had their allocations grandfathered in.

The result has been, for instance, that although the statewide average for allocations to counties is $26.45 per resident per year, San Diego receives only $19.38. But Los Angeles receives $28.86 and San Francisco $54.42.

Similarly, Fresno is considered to have 2.856% of the state’s poverty population and gets 5,000 bed days in the state hospital. But San Francisco, with 2.975% of the poverty population, receives 89,859 bed days.

The suit was filed in 1986 by San Diego, joined later by Tulare, Fresno, San Bernardino, Imperial, Stanislaus and Riverside counties.

If the ruling stands, the department would have to come up with millions of dollars to repay the counties affected by Friday’s ruling, even as the state faces a $12.6-billion budget deficit.

Kassy Perry, assistant director for public affairs at the Department of Mental Health, said the agency would not comment on the decision or its potential effects until it had been studied more thoroughly.

However, the deputy county counsel who handled San Diego’s case, Michael B. Poynor, said the state’s lawyer had said any ruling against the state would be appealed.

Attorneys for San Francisco and San Mateo counties, two of the most active intervenors on the state’s side, were pleased their clients’ budgets were left intact.

“If the judge had found the allocations unconstitutional, that could have put us at risk of losing $10 million to $15 million just in our county alone in state mental health funding,” said Stewart Foreman, attorney for San Francisco in the case.

“The judge understood that all the counties are suffering and tried to balance the hardships,” said Brenda Carlson, attorney for San Mateo County.