By Barbara Hoberock, Oklahoma Voice
OKLAHOMA CITY – Mental health and substance abuse service providers are bracing for cuts as the new head of the state’s mental health department moves to shore up the agency’s budget.
Multiple providers across the state said they’ve begun receiving contract cancellation notifications from the Oklahoma Department of Mental Health and Substance Abuse Services.
But while agency leaders confirmed that they’re canceling or not renewing contracts, they told Oklahoma Voice this week that they did not know how many providers were expected to be impacted nor could they provide a dollar amount of the expected savings to the agency.
The agency could not provide specifics because the process is ongoing, said Jennifer Hogan, communications director.
Interim Commissioner Gregory Slavonic said in a statement that his agency has operated with more contracts than the budget can sustain.
Agency staff reviewed 800 contracts line by line before deciding what to cut, he said.
“These were very difficult decisions, but we cannot spend more than we have,” he said.
The cancellations come as Slavonic attempts to right the agency’s finances following a tumultuous period of uncertainty that required a $27.4 million emergency legislative appropriation to help cover payroll and led to lawmakers in May to remove Allie Friesen as commissioner, despite Gov. Kevin Stitt’s objections.
Lawmakers said they lost confidence in Friesen after significant shortfalls in the agency’s budget and her inability to provide answers about it. The agency had been using current year funds to pay last year’s bills, according to the Legislative Office of Fiscal Transparency.
Hogan said some contracts will end while portions of others aren’t being renewed. The changes are effective Oct. 1.
The agency attempted to protect essential services that align with its mission and ensure those decisions were fiscally sustainable, she said.
Hogan said the agency started with cutting contracts because they make up the largest percentage of the budget.
Slavonic is also looking at the newly hired employees to see if the posts are needed, Hogan said.
According to a state audit, the agency, since Friesen took the helm in January 2024, hired 38 people at a salary exceeding $100,000 and awarded 376 employee pay raises greater than 10%.
Hogan said 23 posts were eliminated for a savings of $3.5 million.
The impact to providers will vary. Some smaller providers will be hit harder financially than larger ones.
About 90% of Parents Helping Parents Inc.’s funding comes from or through the agency, said Tree Kelley, executive director of the organization, which provides resources, support, education and advocacy for parents and families who have a child of any age struggling with a substance abuse disorder.
The organization has a budget of about $240,000 and seven staffers.
Five of them have been told their last day is Dec. 30 due to cuts, Kelley said.
The group provides services in rural communities, she said.
Kelley said the cuts will be devastating for clients.
The cuts will have a “ripple effect” on families, law enforcement and other social support systems, said Jeff Tallent, founder and executive director of Evolution Foundation, which provides mental health and substance abuse intervention services.
Most of the organization’s $800,000 budget comes through the agency and is being cut, he said.
Adam Andreassen is CEO of Tulsa-based Family and Children’s Services, which is the largest certified community behavioral health center in the state with a budget of about $185 million and 1,500 employees.
He said the best guess is that the cuts will reduce his budget by between $1.5 million to $4 million.
Andreassen doesn’t foresee layoffs, but there is a “finite amount of disruption we can withstand.”
“It is a very dangerous process going on right now because of the instability,” he said.
