Arizona’s public behavioral health care system, which serves some 150,000 mentally ill and vulnerable state residents, is wrestling with a number of urgent challenges. In addition to budget cuts resulting from the current economic crisis, and the demands of a 28-year-old class-action lawsuit, the system has been repeatedly criticized in several areas, including for inadequate staff, data, housing support, and crisis services. On July 22, a panel of professionals who play key roles in the system discussed these and other issues before some 300 behavioral health providers, supervisors, and policymakers at the annual Summer Institute hosted by Arizona State University’s Center for Applied Behavioral Health Policy. This paper provides an abbreviated report of that discussion, which was partially designed and moderated by ASU’s Morrison Institute for Public Policy.

Severe and widespread budget cuts in behavioral health and substance abuse services for lower-income Arizonans who don’t qualify for AHCCCS have already taken effect across the state. Even before these cuts were implemented, it was clear that the publicly-supported behavioral health system in our state was not adequately serving many Arizonans who needed mental health or substance use disorder treatment. This paper represents an effort by Arizona State University’s Centers for Applied Behavioral Health Policy and the Morrison Institute for Public Policy to promote and enrich Arizona’s public dialogue about these problems and potential solutions.

Public finance—taxes and other revenues collected by government and the expenditure of those revenues—always has been somewhat controversial because of wide philosophical differences among residents regarding the role that government should play in providing public services and in collecting taxes and fees from its residents. Recently, public finance in Arizona has become a prominent public issue due to the need to resolve the deficits that afflict state government and most county and municipal governments in Arizona.

Arizona is emerging from one of the worst state budget crises in the nation. Entering 2003, its projected deficit, measured as a percentage of the general fund, was the fifth largest in the country.1 The state had slashed spending in 2002 in the face of a $900 million deficit, but still faced a $400 million shortfall for fiscal year 2003 and an estimated $1 billion deficit in fiscal 2004. Although improved revenues have reduced the anticipated gap, fundamental underlying problems remain concerning the ability of lawmakers to control the budget. Some observers consider this a revenue problem, others a spending problem. Our concern in this paper is whether state lawmakers have enough control over either revenue or spending.