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Senate committee advances bill that would make county mental-health funding discretionary after hours of testimony
Summary
The Senate Appropriations Committee voted 8–5 to advance Senate Bill 4, which among other items would remove a statutory CMHC distribution formula and change county CMHC funding from a required ('shall') contribution to discretionary ('may'). Community mental health center leaders warned the change could reduce services for hundreds of thousands of Hoosiers.
The Senate Appropriations Committee advanced Senate Bill 4 after hours of testimony from county officials and leaders of community mental health centers who said the bill’s change from a statutory funding formula and from a mandatory county contribution ('shall') to a discretionary one ('may') could jeopardize services.
Supporters on the bill — including the Association of Indiana Counties — said the change provides counties greater flexibility and a seat at the table for negotiating local arrangements. Jeff Plasterer, who said he serves as president of the Wayne County Commissioners and chairs the legislative committee for the Association of Indiana Counties, told the committee that the association supports allowing elected councils binding review of budgets for taxing units with appointed boards and supports the amendment that delays changes to the CMHC distribution formula to 07/01/2028. "This would give counties the latitude to engage more effectively with our CMHCs," Plasterer said.
Opponents — including CEOs of multiple community mental health centers — said the change would introduce financial risk. "If you remove the 'shall' and make it a 'may,' that will not do the community mental health center system any good," said Steve Howe, CEO of Northeastern Center. Howe said his center serves about 350,000 Hoosiers annually and that county dollars, while a minority of overall budgets, are essential to sustain required programs and to leverage federal matching revenue. "The impact could be fewer services and more incarcerations," he warned.
Beth Keeney, CEO of LifeSpring Health Systems, told the committee that county funding represents roughly 8% of her organization's revenue and that losing that support — together with other recent program changes — would force substantial reductions in services. "County funding helps fill the gap created by decades of low Medicaid reimbursement rates," Keeney said.
Committee members probed both sides on safeguards. Some senators said they were open to amendments that would preserve a baseline of funding while allowing counties additional flexibility; others said the committee should preserve the 'shall' language or require alternative guardrails. Senator Cadore said he would file second-reading amendments if the bill passed the committee.
The committee moved the bill to the Senate floor by roll call. The transcript records the committee vote to advance SB4 as 8 in favor and 5 opposed. The chair said the bill will return for further work on second reading and committee members signaled intent to negotiate language addressing baseline funding or alternate funding protections.
What happens next: SB4 will go forward to the Senate floor. Committee members and CMHC advocates indicated they expect further amendment on second reading to clarify funding safeguards and reporting requirements.
