RALEIGH – I don’t know whether the Democratic majority in the General Assembly proposed major cuts in state mental-health programs as a response to recent scandals or as a means of scaring North Carolinians into supporting tax increases. Whatever the motivation, it was a bad idea.

There were far better places in the state budget to save money. Rather than cut funding for the state’s psychiatric hospitals and mental-health services, lawmakers should have, for example, returned $85 million in University of North Carolina overhead receipts to the General Fund to help finance state-funded facilities, reclaimed tens of millions of dollars a year in tobacco settlement funds now diverted outside the General Fund, and eliminated the hundreds of additional millions of dollars in waste and duplication detailed in JLF’s alternative budget.

Major cuts to state mental-health programs are both unjust and unwise.

North Carolina taxpayers are not and never have been legally responsible for the costs of treating all mental illness. Most mental-health services, in fact, are delivered through a market process involving private providers and private payers (households and insurers). Socializing mental health care is no wiser than socializing physical health care.

However, there has long been a state role in addressing a subset of the need – the chronic, debilitating mental illnesses, development disabilities, and addictions that afflict thousands of low-income North Carolinians. Why? For the inescapable reason that if taxpayers don’t fund interventions for these individuals up front, they will end up paying a larger price in the future for the police, jails, prisons, and public assistance necessary to ensure public order and safety.

Of course, North Carolinians ought to care enough about their fellow citizens to give voluntarily of their time and money to charitable endeavors aimed at the mentally ill, the disabled, and the addicted. But that’s not a proper justification for governmental action. As we have noted many times before, government is not charity. It is not philanthropy. It is force. It can only be justified as a means of providing true public goods and safeguarding individual rights, including the right not to be accosted or victimized by those with undiagnosed or untreated mental conditions.

Once it is decided that state government will have a role in funding mental health interventions for the needy, the next set of questions involve how to go about it. Some people think state and local governments should be the primary providers of mental-health services. Others believe that government should primarily play the role of financier and regulator, with private and nonprofit providers competing for contracts to deliver services.

The Easley administration’s mismanaged reform initiative was based on the latter model, but its failings did not invalidate the model. As JLF’s Joe Coletti has demonstrated, careful analysis of the North Carolina initiative and reform efforts in other states shows that competitive contracting and outsourcing are not just workable but necessary components of a modern mental-health system. What the state didn’t do in the earlier reform effort was guarantee the amount of management, financial oversight, performance standards, and transition funding necessary to make it work.

As a result, hundreds of millions of taxpayer dollars were misspent on services that didn’t match up with the real needs. That doesn’t mean the system was overfunded. It was poorly structured and managed.

In his 2008 paper, Coletti laid out some general principles for moving forward with mental-health reform in North Carolina:

• Give the local management entities (LMEs) both more authority and more responsibility, allowing them to compete and expand across regional boundaries.

• Encourage more counties and LMEs to adopt crisis intervention teams as a way to improve the community-care system, improve public safety, and allow jails to be used for other offenses.

• Ease restrictions on scope of practice that limit the ability of nurses and other doctors to provide access to psychiatric care in more places at less cost.

• Keep Dorothea Dix Hospital open indefinitely and adjust staffing and training at state mental hospitals to the evolving role of hospitals as crisis centers with some long-term patients.

Now is not the time to whack the state’s mental-health budget. Better budget-savings opportunities beckon.

Hood is president of the John Locke Foundation