The much-embattled state mental health care system could face devastating cuts for community services in next year’s state budget, according to a local official.

“The budget under consideration in the North Carolina House of Representatives would cut overall state support for community services by approximately $250 million next year,” Sandhills Center CEO Michael Watson said in a release this week. “Additional massive reductions are proposed in Medicaid services that provide community care for many of our consumers.”

He explained the budget also calls for a 5.5 percent cut in Medicaid rates paid to service providers.

Watson said the reductions do not target any specific services, but in total could represent up to 20 percent of funding for state services.

“Absent any specific direction from the State regarding what services to cut, the Center’s Board of Directors would have to make these very difficult decisions,” Watson wrote in an e-mail Thursday. “For example, do we continue to support crisis/walk-in centers such as our county outpatient units and inpatient psychiatric care, or do we make cuts that impact group homes for children with mental health treatment needs.”

Sandhills Center is a local management entity (LME) of the North Carolina Department of Health and Human Services. It has an eight-county jurisdiction, including Richmond County, in which it is responsible for assuring the availability of public services in the areas of mental health, developmental disabilities and substance abuse.

The local access point for these services in Richmond County is on Lawrence Street in Rockingham.

“Our county outpatient units represent a core crisis service that would be a priority for funding - the issue will be the very real danger that cuts in other services areas will generate a demand for intensive care that these units will not be able to meet,” Watson said. “The state’s current economic challenges have already generated an increased demand for services.”

A budget update from the Mental Health Association in North Carolina on Thursday reported a worsening situation for advocates of these services in Raleigh.

The group said some examples of new mental health budget-stripping include a decrease in special assistance, the implementation of a preferred drug list, the reduction or elimination of community support services, the elimination of a continuation budget in Medicaid and $74 million in state funding cuts.

Watson used a term the mental health field in North Carolina has come to learn through its long process of privatization and reform to describe what the cuts will create - “unintended consequences.”

“The proposed cuts represent a disaster for our communities and will endanger our most vulnerable citizens,” Watson said. “The loss of community funding will have unintended consequences including increased jail populations, increased emergency room usage, the loss of community supports for children and adults with developmental disabilities and decreased access to such critical services such as community psychiatric care and inpatient treatment.

“Our communities will be less safe and humane because of these cuts.”

Watson said the system is already operating under woeful financial pressures.

“Over the past decade state funding levels have not kept up with service demands or the growth in our state’s population,” he said. “Sandhills is already forced to make difficult decisions about how to spend our existing funds - these cuts will only make a difficult situation worse.”

“If they cut as much as some of them are talking about, it will really take a toll on the clients,” Richmond County Commissioner and Chairman of the Sandhills Board Thad Ussery said Friday. “We really don’t know how to react to some of the things we hear, but one thing really bothers me about this budget discussion. We’ve spent a lot of money and time realigning so they could close down state hospitals and cut costs. Then, once we get all these private providers lined up, they’re talking about cutting our funding and we’d have to let some of them go. I don’t know what they can say they have accomplished in revamping the mental health care system if they don’t provide the funds to keep taking care of the clients.”

Ussery explained that in the past, when the LME handled billing, they could keep a percentage of Medicaid payments to build fund balance. This is no longer an option, and the entity is restricted to running off of state funds.

“We’re just swapping funds from one balance to another, and there’s no real way to accumulate revenues,” he said.

“It is particularly tragic that such deep cuts in services are being proposed at the very time the demand for them is increasing as the economy suffers,” Watson said. “As families are disrupted by the economic realities we face, it is critical that our communities be able to provide the supports necessary for safety and welfare.”

“This is really pretty unprecedented,” Watson said. “I think the only solution is some partial increase in revenues and some compromise around what kind of cuts we’re actually going to see next year.”

Watson, along with state mental health advocacy groups, is encouraging people to contact their legislators about the severity of the cuts and the mental health services that would have to scale back.