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The federal government ends financing for mental health treatment in institutes for mental disease (IMD), which are identified as facilities that primarily exist to deliver mental health services. Thus, states are incentivized to move mentally ill patients out of psychiatric hospitals.
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This landmark legislation, signed by Governor Ronald Reagan, prohibits involuntary hospitalization for mentally ill patients on the grounds that it is inhumane.
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Limits property taxes to no more than 1% of assessed valuation, resulting in a sharp decline in property tax revenue.
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Establishes block grants for the states, which put municipal mental health services in financial competition with other public services, and officially ends the federal government's role in providing mental health care.
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Increases the state income tax by 1% for millionaires to fund mental health services. Funds are used to create prevention and community engagement programs.
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