Subcommittee advances Mental Health Regulatory Agency budget; funds two compliance positions

The Education Subcommittee of the Joint Committee on Ways and Means on May 8 voted to move SB 5532, the appropriation bill for the Mental Health Regulatory Agency (MHRA), to the full Ways and Means Committee with a due-pass recommendation after the Legislative Fiscal Office presented the recommended budget and a related budget note.

Why it matters: The MHRA provides administrative and regulatory oversight for the Board of Licensed Professional Counselors and Therapists and the Board of Psychology. The recommended budget restructures staff to support licensing and compliance, funds two new positions to improve investigations and compliance functions, and is projected to leave the agency with multi-month operating reserves.

LFO recommendation and breakdown: Michael, Legislative Fiscal Office analyst, told the committee the 2025–27 LFO-recommended budget for MHRA is $7,196,001 other funds and includes 17 positions (17.0 FTE). Michael said the recommended budget “represents a 15.9% increase from the 2023–25 legislatively approved budget and a 7.7% increase from the current service level budget.” He told members the increase primarily reflects restructuring of agency staff to improve operations and customer service, and that the recommended budget is projected to leave the agency with an ending balance of approximately $2,331,610, equivalent to 7.8 months of operating expenses.

Board-specific figures: The LFO split shows the Board of Licensed Professional Counselors and Therapists with a recommended budget of $5,037,201 other funds, about $677,068 (15.5%) more than the 2023–25 LFO figure and leaving an estimated ending balance of $1,196,030 (5.7 months of operating expenses). The Board of Psychology's recommended budget is $2,158,800 other funds, an increase of $310,664 (16.8%) over 2023–25 and an estimated ending balance of $1,135,580 (12.6 months).

Policy package and positions: The recommended package 551 increases expenditure limitation by $512,295 other funds to establish two new permanent positions within MHRA to support compliance functions: one compliance specialist 2 and one investigator 2, with the FTE split allocated 0.75 to the counselors and therapists board and 0.25 to the psychology board for each position. The package also reclassifies two existing permanent positions (a licensing and permitting supervisor 2 to licensing and permitting manager 1, and a program analyst to licensing and permitting supervisor 1) to assist with licensing oversight.

Key performance measures and budget note: LFO recommended no KPM changes for the counselors and therapists board and recommended decreasing the target for KPM number 4 for the Board of Psychology from seven days to five days. LFO also recommended a budget note directing the MHRA, in consultation with the Board of Licensed Social Workers, to return to the Education Subcommittee during the 2026 session with a report on the status of developing a new licensing database; that report should include estimated project costs, timelines, and a plan to fund the project through licensing revenue, including ongoing operations and maintenance costs.

Discussion and committee concerns: Representative McLean asked about efficiency and whether the restructuring would produce measurable improvements; the LFO analyst said the assignment was recent and offered to follow up. Committee members discussed broader state IT coordination for licensing databases during the budget-note discussion; one member suggested a more centralized, uniform IT approach could produce savings across boards.

Motions and outcome: The committee adopted the dash-1 amendment reflecting the recommended $7,196,001 other funds and 17 positions and moved SB 5532 as amended to the full Ways and Means Committee with a due-pass recommendation. The dash-1 amendment and the final recommendation were adopted with no objections on the record.

What’s next: The MHRA is directed to report to the Education Subcommittee during the 2026 session on licensing-database development, estimated costs and a funding plan; SB 5532 will be carried to full committee for further consideration.