Funding Explained

Texas mental health and substance use services funding is multi-layered and complex and is provided through both state and federal dollars. Funding is funneled through state agencies, institutions of higher education, local mental health authorities, federally qualified health centers, community health clinics, and more. Funding may funnel through contracts or grants by state agencies partnering with community providers. Further, the state relies on a variety of providers, non-profits, and private entities to carry out programs and projects.

Sources of Funding: State and Federal

Mental health and substance use services in Texas are funded both through state and federal funding. This past legislative session the state made historic investments into the public mental health system, focused mostly on state hospital infrastructure and psychiatric beds for people with the highest level of need. The funding is sorely needed in order to strengthen the state’s aging state hospital facilities, but there is also a need for investments in other community-focused interventions to serve Texans who are not in crisis.

The largest portions of federal funding are received through Medicaid and the mental health and substance use block grants. Texas jointly funds Medicaid services with the Centers for Medicare and Medicaid Services (CMS) and jointly funds block grants with the Substance Abuse and Mental Health Services Administration (SAMHSA). Other time-limited federal funds come down to the state through the 1115 Waiver and Texas Targeted Opioid Response (TTOR).

During the COVID-19 pandemic, the federal government provided emergency relief funds through various pieces of legislation, inclusive of funds used for mental health and substance use. Texas was given authority to allocate many of these funds and legislated several decisions during the 87th Legislative Session – Third Called Special Session in 2021. Other funds were directly passed through local governments and entities. Most COVID-related funding is set to expire in 2025, leaving entities looking for other forms of sustainable funding to continue those projects and services. More information on these funds’ allocation can be found below in the Federal Funding section.

Service Demand

Demand for mental health and substance use services in Texas has steadily increased in recent years. One reason for increased demand is the rapid growth of the Texas population. As of July 2022, the state population estimate from the U.S. Census Bureau was 30,029,572, up from 25,145,561 in 2010.1 Texas’s growth rate of 15.9 percent was more than double the growth rate of the nation (7.4 percent).2 It’s important to note that over 95 percent of the state’s growth was attributed to the increase in the number of persons of color.3

Funding alone does not ensure equitable access to services across the state. Rural and historically under-resourced communities continue to face a myriad of barriers to needed services. Despite investments, factors such as Texas geography and access to transportation and broadband, decline in behavioral health providers, population growth, and residual behavioral health impacts of the COVID-19 pandemic have resulted in more people requiring and seeking care than state agencies alone can serve.4

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State Funding

The Statewide Behavioral Health Coordinating Council (SBHCC) is comprised of the 26 state agencies and institutions of higher education that receive state funding for behavioral health services. Each entity provides some level of mental health/substance use services or mental health/substance use education and training.
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Federal Funding

Mental health and substance use block grant funding is distributed in a non-competitive manner to states based on congressionally mandated formulas and provides each state a consistent federal funding stream.

References

  1. The United States Census Bureau. (2023). Texas quick facts. https://www.census.gov/quickfacts/TX ↩︎
  2. Texas Demographic Center. (2023). Demographic trends: Texas and the San Antonio area. https://demographics.texas.gov/Resources/Presentations/OSD/2023/20231129_CityOfSanAntonio.pdf?v=2023112912 ↩︎
  3. Ibid. ↩︎
  4. Texas Health and Human Services. (2022). Texas statewide behavioral health strategic plan: Progress Report, Fiscal Year 2022. Statewide Behavioral Health Coordinating Council. https://www.hhs.texas.gov/sites/default/files/documents/texas-statewide-behavioral-health-strategic-plan-progress-report-dec-2022.pdf ↩︎

Updated on December 11th, 2024



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