SALEM — The Oregon Legislature is getting ready to pass the largest investment in the state’s mental health system in recent memory — a development that advocates and lawmakers say could lead to meaningful changes in a system that has been unable to meet demand.

In a package likely to reach at least $350 million, lawmakers are hoping to pay for a “surge” in workers available to address mental health issues at all levels, spring for new housing and outreach programs, and take a long look at how the state’s overall system should be restructured.

That investment, proponents say, will allow Oregon to begin digging out of a mental health and homelessness crisis thrown into stark relief by the COVID-19 pandemic.

“It’s not going to all roll out smoothly or awesomely, but we’re going to get started,” said state Rep. Rob Nosse, D-Portland, who co-chairs a budget subcommittee dealing with health care. “We’ll all hopefully look back four to six years from now and go, ’2021 was the year things started to turn around.’”

The problems facing Oregon’s mental health system are not new. Advocates have long argued that the state needs to fund more treatment at the community level, rather than waiting for people with mental health issues to devolve to the point they need higher levels of care or hospitalization.

But that type of extended investment hasn’t occurred. Two years ago, lawmakers even considered cutting funds for county-based mental health programs based on modeling many found dubious.

In the meantime, Oregon’s unsheltered homeless population has increased, with many in that population struggling with mental health issues.

The Oregon State Hospital is also overwhelmed with criminal defendants deemed unfit to “aid and assist” in their own defense, and who a court order requires the hospital to treat in short order. The explosion in that population has crowded out other, potentially more appropriate, cases the hospital could treat, and comes amid a dire staffing shortage brought on by the pandemic.

In oft-cited — and sometimes disputed — national rankings by the group Mental Health America, Oregon’s mental health system comes in 49 out of 51, a function of having the nation’s highest prevalence of mental illness, and only middle-of-the-pack access to care.

“Not only do we not have any off-ramps before people get there, we’ve got people stuck at the state hospital because there are no step-downs” to less-intensive care, said state Sen. Kate Lieber, D-Beaverton, who has been working with Nosse to create a funding package this year.

Lieber is a former prosecutor who came to the Legislature this year having served on the state’s Psychiatric Security Review Board, which decides when people found “guilty except for insanity” are fit to leave the state hospital. She says she ran for office with an interest in figuring out how the mental health system interacted with rising homelessness.

Large areas of need

Together with Nosse, Lieber began speaking with people throughout the mental health system about the largest areas of needs. “We talked to a ton of people, and it was like we were hearing the same thing: gotta invest in community,” she said.

The exercise could have been little more than a thought experiment, but then the state saw a windfall. Not only did the federal government send Oregon $2.6 billion through the American Rescue Plan Act passed in March, but a May revenue forecast suggested the state had billions more dollars to spend than previously expected.

So when Nosse and Lieber put together a formal budget proposal, “I think people were ready to hear it,” Lieber said. “And quite frankly, we had the money to do it.”

While the numbers are still subject to the overall budget process, lawmakers working on a spending plan say it will likely be roughly $350 million.

“This is a really big swing,” Nosse said. “I’ve never been involved with anything this massive.”

As currently envisioned, the first piece is the roughly $100 million “surge” meant to help incentivize people to go into behavioral health professions — and remain there — through scholarships, student loan forgiveness, and other inducements. A bill drafted by state Rep. Janelle Bynum, D-Clackamas, to increase diversity in the state’s behavioral health workforce is the vehicle for that investment.

A second piece would put money into new housing and treatment options for people with mental health challenges. As laid out by Lieber and Nosse, the state would put $20 million into a new fund specifically for behavioral health housing. And the Legislature would set aside up to $180 million in a “regional development and innovation” pot reserved for community mental health agencies, which could apply for funding their most pressing needs.

The proposal also contains money to open two units at the Oregon State Hospital’s campus in Junction City for people who need less than hospital-level care. The new capacity would free up bed space in the main hospital, lawmakers say.

And the package would potentially fund four “peer respite centers” run by people with a lived experience of mental illness, along with helping pay for community behavioral health clinics that can assist with physical ailments while also being treated for mental health challenges.

In what Lieber called the “squishiest and most important” piece of the package, the proposal she and Nosse delivered last month would include $100 million to help the state create a plan to make meaningful progress, a process that would include establishing metrics for success.

“If we don’t have the data, we’re not going to understand how the system is failing. (The Oregon Health Authority) has to create a roadmap,” Lieber said.

Lieber explains the budget package as one piece of a greater puzzle. She says that big investments in affordable housing development and substance abuse issues being taken up in other areas of the budget will work in concert with the funding she’s proposing.

“You can’t treat somebody’s behavioral health and expect them, if they don’t have housing, to stay stable,” she said. “And you can’t treat somebody’s substance use disorder without treating their underlying behavioral health, because that’s probably why they’ve been self-medicating to begin with.”

The proposal by Nosse and Lieber appears all but certain to pass this year, with the state’s top budget writers affirming their support. That has advocates who’ve long pushed for more investment talking with a new optimism.