Federal Block Grants to States for Mental Health, Substance Abuse, and Homelessness: Potential Improvements to Funding Formulas
Jun 19, 2019
The formulas for distributing funds to states under three block grants (the Community Mental Health Services Block Grant [MHBG], the Substance Abuse Prevention and Treatment Block Grant [SABG], and the Projects for Assistance in Transition from Homelessness [PATH] program) have not been updated since 1992. RAND researchers conducted this congressionally mandated study to determine whether the formulas should be modified to reflect the changing landscape for mental health and substance abuse services and make use of improved data.
The current MHBG and SABG formulas have three components: population need, cost of service delivery, and state fiscal capacity. The PATH formula has only one component: population need. The authors concluded that the formulas for all three block grant programs can be revised to improve their accuracy. Specifically, the cost of services indicators would benefit from revised weighting based on current cost patterns, and population need indicators can draw on the best available data sources that directly measure need. For all formulas, the current minimum allotment rules should be removed, and the best available data should be reviewed every five years to determine whether additional updates are needed. If the formulas are changed, new hold-harmless rules for all programs should be established to protect states from large decreases in funding as changes are implemented.
Introduction and Background
The Current Formulas
Approach to Identifying Potential Changes to the Formulas
Approach to Evaluating Potential Changes to the Formulas
Cost of Service and State Fiscal Capacity Indicators for Mental Health and Substance Abuse Prevention and Treatment Block Grants
Community Mental Health Services Block Grant
Substance Abuse Prevention and Treatment Block Grant
Projects for Assistance in Transition from Homelessness
Conclusions and Recommendations