Pennsylvania’s mental health system has failed to deliver on decades-old promises to build community-based care in place of state psychiatric hospitals, leaving families with severe mental illness trapped in cycles of crisis, inadequate treatment, and incarceration. A Spotlight PA investigation following one family’s desperate situation reveals how funding cuts, systemic disinvestment, and jails filling the void once occupied by psychiatric hospitals have created an untenable situation for people with mental illness and those trying to care for them.
Historical Context and Broken Promises
By the late 1980s, Pennsylvania began closing state psychiatric hospitals—including Philadelphia State Hospital—after reports of barbaric conditions and patient deaths. Advocates and policymakers promised that community-based care would replace institutional care. The U.S. Supreme Court affirmed this obligation in 1999 with Olmstead v. L.C., requiring states to provide community-based care access. However, Pennsylvania’s efforts have stalled. A federal appeals court ruled in 2005 that Pennsylvania’s Community Hospital Integration Project Program (CHIPP), established in 1991 to shift funding from hospitals to communities, “inexplicably” failed to follow through on its goals. Judge Max Rosenn wrote that “General assurances and good-faith intentions neither meet the federal laws nor a patient’s expectations.”
Progress and Collapse
Pennsylvania made significant progress in the mid-2000s under former Governor Ed Rendell. The state closed Harrisburg (2006), Mayview (2008), and Allentown (2010) psychiatric hospitals, formalized community treatment teams, and funded peer specialist positions. Joan Erney, who oversaw closures as deputy secretary, recalled, “I think that we all felt extraordinarily optimistic about the future of the program.”
That momentum collapsed in 2013 when Governor Tom Corbett made catastrophic budget cuts to county mental health departments in response to recession pressures. Corbett’s cuts eliminated the dedicated mental health funding mechanism. Counties had been required to provide mental health services but had relied on state base dollars to do so; those dollars vanished. For over a decade under subsequent administrations, funding did not return. Between 2017 and 2023, statewide mental health spending declined roughly $147 million, and services reached fewer people—declining from about 435,000 to under 350,000.
Jails Replace Hospitals
As counties have shrunk services, Pennsylvania’s jails have become the de facto mental health system. A 2024 analysis by Spotlight PA and the Lehigh Valley Justice Institute found that more than 60% of people jail staff screened for mental health needs required services while incarcerated. Between 2017 and 2022, the share of incarcerated individuals in serious psychiatric categories grew by roughly five percentage points. Between 2014 and 2022, the rate of jailed individuals on suicide watch per 1,000 more than doubled, and the percentage on psychiatric medication increased from under 25% to roughly 40%.
County mental health administrators describe the dysfunction starkly. Scott Baldwin, Lawrence County’s mental health administrator since 2020, said people with serious mental illness experience “hospital, community, relapse, homelessness. Or worse. That’s the system.” In rural areas like Lawrence County, limited state funding overburdens few programs. Baldwin noted that “the state has a statutory and constitutional obligation to assess and treat all individuals that courts have deemed incompetent to stand trial in a timely manner.”
Recent Investment and Ongoing Gaps
In 2024, Governor Josh Shapiro proposed and the legislature approved a $40 million increase in county base funding over his first two years—the first significant increase in over a decade. Shapiro proposed an additional $20 million in his 2025 budget. However, experts told Spotlight PA these investments have not yet reversed years of underfunding. The state received billions through the American Rescue Plan Act during COVID-19; in 2022, the legislature set aside $100 million to support the mental health system. A commission studying the system found that “The Department of Corrections and county jails have unintentionally become the largest providers of behavioral health services in the Commonwealth and are not sufficiently prepared and resourced to meet this population’s needs.”
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.spotlightpa.org/news/2025/07/pennsylvania-community-mental-health-crisis-funding-olmstead-implementation-health/