Community-based residential programs are one of the most effective parts of our mental health system. But these programs have struggled for years to maintain essential housing and support services while operating under funding structures that have not kept pace with inflation.
That’s why the Senate and Assembly’s inclusion of a 4% targeted inflationary increase in their one-house budget bills represents meaningful progress. With this 4%, the Legislature acknowledges the rising costs providers face and the need to fairly compensate the direct-care workforce supporting individuals living with serious mental illness.
As lawmakers work toward a final budget, it is equally important that this funding remain flexible, allowing providers to address the full range of operating costs necessary to keep these programs stable and effective.
Mental health residential programs play a critical role in New York’s health care system. They provide safe housing and supportive services for individuals living with serious psychiatric disabilities, helping residents stabilize, pursue recovery and live independently in their communities. These programs serve as a bridge between hospital care and long-term stability, reducing reliance on emergency rooms, inpatient beds, shelters and other costly institutional settings.
Despite their importance and cost effectiveness, funding for these programs has consistently lagged behind inflation. Over the past five years, state funding adjustments have fallen 6.2% below inflation, and over the past two decades cumulative adjustments have been more than 28% below inflation.
Because these programs are state-funded, providers cannot raise wages or cover rising operational costs unless funding increases. When state support fails to keep pace with inflation, the result is a funding cut that erodes services and places programs at risk.
Concurrently, providers face growing operational expenses, including insurance, utilities, food, property maintenance, transportation, technology and compliance requirements. The direct-care workforce delivering these services also face wage pressures.
The Legislature’s proposal recognizes these pressures. However, portions of the increase in the one-house proposals are currently restricted to mandated wage increases. While strengthening the workforce is essential, restricting how these funds may be used would limit providers’ ability to address other urgent operational costs.
Mental health residential programs operate in urban, suburban and rural communities across New York. The challenges faced by one program may differ significantly from the issues faced by another. Some may struggle to recruit clinicians; others face rising insurance or maintenance costs. Flexibility allows providers to direct funding where it is most needed to keep programs operating safely and effectively.
Strong oversight mechanisms already exist to ensure accountability. Human services providers must comply with extensive financial reporting, contract monitoring and regulatory oversight, including state audits.
Community-based mental health housing is one of the most cost-effective investments New York can make — supporting recovery, preventing crises and strengthening communities across the state. Maintaining the Legislature’s proposed 4% increase in the final budget will help address the system’s financial pressures — and ensuring that the increase remains flexible will allow providers to stabilize their workforce while also covering essential operating costs.
Doug Cooper is the associate executive director of the Association for Community Living.