More than 4,000 mentally ill Utahns — many of them children — are in crisis or fast approaching breakdown because of a change in federal funding to community mental health centers across the state.

"Almost 10 percent of the clinic populations are now without help, and all have mental illness," said Jack Tanner, director of the Utah Behavioral Health Network.

The fallout of the funding shortfall was detailed in Thursday's legislative meeting of the Health and Human Services budget committee, which will ultimately decide how much state money will be spent to meet the pressing need.

Gov. Jon Huntsman Jr. has recommended an allocation of $3.1 million to counter the shortfalls at local mental health centers. The need has been estimated at nearly $8 million.

The funding shortfalls stem from a federal rule that went into effect as a result of the Federal Balanced Budget Act, which altered the formula for how mental health centers are reimbursed with Medicaid dollars.

Previously, the centers could collect one Medicaid dollar for services to Medicaid patients, even though the actual costs were only 93 cents. The remaining seven cents of "profit" could then be used to expand services in the community, including offering help to those who were not eligible for Medicaid.

"They are the sickest and poorest among us," Tanner said. "What is lost is this opportunity to manage an illness that can be successfully treated. What is lost is the hope for the process of recovery."

Utah Hospital Association's Dave Gessell said that since June McKay-Dee Hospital has experienced a 40 percent increase in people seeking treatment in emergency rooms.

Gessell and others on the front line of the problem say without adequate funding, emergency rooms will continue to fill up, and people with mental illness will see increased contact with law enforcement.

"The problem is even more acute in rural Utah, where there is no option but the emergency room or jail."

Utah County Commissioner Steve White, who also is chairman ofchairs the mental health authority board in his area, said unless lawmakers act now to address the crisis, it will only cost more later.

"We just need some help here, otherwise we will be paying on the backside," through hospital bills and incarceration, he said.

"This is catastrophic in people's lives," said Vicki Cottrell, head of Utah's National Alliance for the Mentally Ill.

"This is not just a request for funding another social program; to me this is humanitarian aid to help people who, through no fault of their own, will be lost."

The crisis has thrown other health providers into a quandary, where in Ogden, the Midtown Community Health Center has seen 126 people since June who have sought help for mental illness.

"We are not mental health specialists, but there is no place for them to go."

Tanner pointed out to committee members that state support of mental health programs has a track record of being woefully inadequate. Over a six year period ending in 2002, Tanner said mental health funding grew by 15 percent, compared to funding for all other human services programs which jumped by 30 percent.

"Some will become dangerous public health and some will suicide," he said.

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E-mail: amyjoi@desnews.com