Behavioral health providers are weighing whether to close programs focused on mental illness prevention and opioid recovery after the federal government abruptly slashed hundreds of millions of dollars from the state’s health budget this week.
The state’s dual behavioral health agencies – the Office of Mental Health and the Office of Addiction Services and Supports – notified providers on Tuesday that their contracts for substance use and mental health programs that were funded through Covid-19 relief bills had been terminated immediately by President Donald Trump. The cuts, led by Elon Musk’s Department of Governmental Efficiency, resulted in a $300 million funding loss for the Department of Health and the state’s two behavioral health agencies, according to Gov. Kathy Hochul.
“We recognize that this abrupt decision is not only deeply concerning but will also affect many of you directly — including programs, staff, and most importantly, the individuals and communities we serve together,” Dr. Chinazo Cunningham, commissioner of the Office of Addiction Services and Supports, said in a Tuesday email to providers that was reviewed by Crain’s. The agency is still working to determine how much funding will be cut from individual providers, and plans to send notices in the coming days, Cunningham said.
Many providers now face uncertainty about whether they’ll have to immediately shutter pandemic-era programs that they say helped the state improve access to mental health treatment and reduce overdose deaths. The sudden halt in funding could cut off care for individuals recovering from substance use disorder or mental illness, and reverse progress the state has made in reducing the number of overdose deaths, they say.
“We are finally turning a corner on the fentanyl crisis,” said Dr. Jeffrey Reynolds, president and CEO of Family and Children’s Association on Long Island, which provides substance use and mental health services. “Just as we started to hit that milestone, the door slammed shut.”
The federal government announced more than $12 billion in funding cuts stemming from the U.S. Department of Health and Human Services. The bulk of the spending reductions – $11.4 billion – is from the Centers for Disease Control and Prevention, with the remaining $1 billion coming from the Substance Abuse and Mental Health Services Administration, according to a federal spokesperson.
“The Covid-19 pandemic is over, and HHS will no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago,” the spokesperson said. The department is prioritizing spending on projects that will “deliver on President Trump’s mandate to Make America Healthy Again,” they added, pointing to the administration’s emphasis on reducing chronic illness.
The move terminates behavioral health funding that flowed through two pandemic-era bills: the Coronavirus Preparedness and Response Supplemental Appropriations Act and the American Rescue Plan Act. Though the funding was authorized through Covid relief legislation, it funded programs unrelated to infectious disease, including street outreach efforts for drug users or crisis phone lines.
Representatives from the governor’s office, the Office of Mental Health and the Office of Addiction Services and Supports did not provide estimates of how much the Covid relief bills supplied to each agency.
Contracts dependent on this funding were expected to sunset in September, but the early termination has left providers in limbo about how to keep their programs running for the next six months.
Family and Children’s Association, for example, receives approximately $300,000 in federal Covid relief dollars to run a substance use recovery center in Riverhead, according to Reynolds. The center is a social space that helps people stay sober and improve their relationships, offering workshops to help people reconnect with family or parent their kids.
The funding also supports outreach programs that get people into treatment. Midtown-based substance use treatment organization Stay’n Out relies on $600,000 in federal funds to run an outreach program in Brooklyn, according to CEO Seep Varma. The program employs 10 people, six of whom are peer workers and have worked to develop relationships with people struggling with substance use for months, Varma said.
State overdose deaths have dipped modestly in the past year, but the death count is higher than it was in 2019 and continues to worsen in communities of color. The federal government pulled funding for addiction programs just a week after U.S. Health Secretary Robert F. Kennedy Jr. redeclared the opioid epidemic a national public health emergency, a move that Varma described as a “hypocrisy.”
“They talk about fentanyl, redeclare a public health emergency but then cut providers with no notice,” he said.
Hochul called the cuts “devastating” in a statement on Wednesday, saying it’s not likely that the state will be able to cover the gaps.
Advocates sent a letter to Hochul on Thursday urging her to include contingency funds for substance use and mental health agencies in the state budget due next week, saying it could mitigate the immediate impacts of the funding losses and allow community providers to ensure continuity of care.
