Earnings from Tennessee’s mental health trust fund for kids slow to roll out

Two years after Tennessee passed a law to make a one-time $250 million investment in mental health services for school-age children, plans on how to spend earnings from the trust fund are still being made. Any mental health expenditures won’t take place until the 2024-25 fiscal year. 

Work continues on an assessment of mental health services available for children in each of the state’s 95 counties. The assessment will inform future spending from the investment, called the K-12 Children’s Mental Health Trust Fund.

“Much has been done with funds allocated by Governor Lee and approved by the Tennessee General Assembly for use while the interest grows on the K-12 Mental Health trust fund, so saying nothing has been spent doesn’t show the full picture,” said Matthew Parriott, spokesman for the Tennessee Department of Mental Health and Substance Abuse Services.  

Parriott said in an email that he was concerned that readers “will somehow get the impression that the state of Tennessee is simply sitting on the trust fund and doing nothing else for children’s mental health.”

Current departmental  spending pays for a children’s behavioral health safety net for uninsured and underinsured children, the Tennessee Resiliency project supporting grants for local projects, suicide prevention and mental health awareness efforts, and increasing the number of school based-behavioral health liaisons, he said. The state also has raised reimbursement rates for mental health service providers in fiscal years 2023 and 2024. Higher rates can encourage providers to accept insurance as payment.

Rep. Chris Hurt, R-Halls, a former high school teacher, carried the mental health investment bill in the state House for the Lee administration and said he knew it would take time to implement it. The bill passed in 2021 with some Democrats joining members of the legislature’s Republican supermajority in voting for it.

“Frankly, I thought it would be a little sooner” for trust earnings to be available for spending, Hurt said in a phone interview. He said he thought spending might begin in the 2023-24 fiscal year, which starts in July.  

Hurt said the trust was set up to assure that money would be available for children’s mental health in perpetuity, in good economic times and bad. Otherwise, with regular appropriations instead of an investment, the legislature would have to decide every year on mental health funding.

“We are truly excited for the impact of the state’s K-12 Mental Health Trust Fund,” Marie Williams, a licensed clinical social worker and commissioner of the Tennessee Department of Mental Health and Substance Abuse Services, said in an email.  “We know the earnings from this investment will provide stable, meaningful, life-changing mental health services for Tennessee children and youth for decades to come.  We also know that the more than $26 million in new state funding for children’s mental health services our department has received in the last five budgets is already changing the trajectory of children’s lives all across Tennessee.”

The 2021 legislation placed $225 million in a trust solely to earn interest that would then be paid out of a separate reserve account containing $25 million and any earned interest. The $225 million can never be spent; any spending comes out of the reserve account. Under state law, the $225 million must be invested in debt securities such as bonds; Tennessee Treasury spokeswoman Shelli King said the trust has earned $7.1 million since inception.

Money can be spent not only on mental health services, but to cover fees to administer the account and to pay for the assessment of mental health services. No funds have been withdrawn or spent from the K-12 fund to date, King said. An outside consulting firm, Verus Advisory, is paid about $1,800 each quarter from a separate Treasury fund for investment consulting and performance tracking related to the K-12 mental health trust fund.

Rep. Gloria Johnson, D-Knoxville, a retired teacher, said she wonders why millions were placed in trust rather than spent over several years on kids’ mental health needs. Other lawmakers, including at least one Republican, raised the same question back in 2021.

“I just see it as a big show,” Johnson said of the trust fund. “To me they passed something so they could say we gave $225 million” for children’s mental health. “The impression was that this was going into public schools to address mental health … People forget after the grand gesture and aren’t asking what the money is doing right now.”

“I definitely disagree,” Hurt said. “In the long run (the trust fund) will provide good, needed services.”

Meanwhile, families struggle to find behavioral health help for their children. Parents contacted for this article were hesitant to talk about children’s behavioral health concerns. Those who were willing to talk wanted to remain anonymous. Two Tennessee parents spoke about seeking behavioral health help for children. Two others who didn’t want to speak at all for publication had similar comments. All of these families were covered by commercial insurance.

One parent talked to their regular pediatrician and friends for referrals and did online searches, only to find long waits for appointments. In the end, a friend who was a provider was able to see the child immediately. The parent didn’t have to seek emergency room support, and the child had a good experience and outcome.

Another parent had experience with both school-based and private provider counseling and was happy with both. Even though there was a one- to two-month wait to see the private provider recommended by friends, the parent received information on behavioral health topics from the provider, which was helpful during the wait.

This parent also said they could have made an appointment more quickly with a psychiatrist who could prescribe medications but couldn’t personally offer talk therapy. The parent thought it was best for the child to talk to a therapist before the family considered medications.

It’s likely that many Tennessee parents through the state have faced these situations.

According to July 2022 U.S. Census estimates, more than 1.1 million youth between age 5 and up to 18 live in Tennessee. More than 900,000 attend Tennessee public schools, including adult students, according to the Tennessee Department of Education’s annual statistical report for the school year that ended last June.

Williams told mental health trust fund trustees in 2022 that the “approximate prevalence of any mental illness among Tennessee youth,” ages 3-17, in the last year, was 300,000. And of children who received mental health services, more than 60% got help at their schools, she said.    

Parriott says about 55.9% of Tennessee children are covered by commercial insurance. TennCare covers about 38.6% of children and about 5.6% are uninsured, while funding from the Department of Mental Health focuses on the uninsured, he said. 

From the beginning of his administration, Lee has recognized the state’s mental health needs. The department’s budget has risen during his administration from about $404.1 million in the 2019-20 fiscal year to an estimated $575 million for the 2022-23 fiscal year. Lee became governor in 2019. 

Asked about children’s mental health and the trust fund for this article, Lee said in a statement: “This year, in light of the (mass shooting)  tragedy at Covenant (School), the Governor and General Assembly worked to pass enhanced school safety measures, including additional mental health resources, in the FY23-24 budget. 

“The Governor and the Tennessee General Assembly have prioritized investments in school safety every year since 2019, including the Mental Health Trust Fund and expanded mental health resources for students and parents.”

Heather Kreth has a broad perspective on children’s mental health as clinical director of inpatient behavioral health at Monroe Carell Jr. Children’s Hospital at Vanderbilt. She holds a doctoral degree in psychology, is a licensed psychologist and is associate professor in the divisions of psychology and hospital medicine at Vanderbilt. 

“My job exists because so many children and adolescents are in crisis and ending up in (hospital) emergency rooms,” she said. 

On any one day, five to more than 30 children ages 4 and up to 18 may have been admitted to Children’s Hospital because of psychiatric emergencies. 

The average number, she said, is 12. More than half will have come to the emergency room because they have harmed themselves or have threatened to harm themselves, she said. Others cannot regulate their own behavior enough to allow them to function in their school or community. The children come to Vanderbilt from the Midstate, southern Kentucky and northern Alabama. 

Most parents who come to the Children’s Hospital ER have tried, often many times, to find help for their child, only to be unable to afford the cost of a provider, or in many cases, to find a provider at all, even with commercial insurance coverage. 

“No parent wakes up in the morning and says, ‘I’ll take my kid to the emergency room,’” Kreth said. “They’re only coming to us because they have no other option.”