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F I S C A L I M P A C T R E P O R T

SPONSOR Moore

DATE TYPED 1/25/05

HB 75

SHORT TITLE 8 County Alcohol Treatment Center

SB

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$22,500.0

Recurring

Tobacco Set-

tlement Program

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPC)

Department of Health (DOH)

SUMMARY

Synopsis of Bill

House Bill 75 appropriates $22.5 million from the tobacco settlement program fund to the De-

partment of Health for expenditure in FY06 through FY10 for the purpose of funding eight-

county regional alcohol treatment center and intensive aftercare and transitional living programs

in Curry, De Baca, Guadalupe, Harding, Quay, Roosevelt, San Miguel, and Union counties. The

bill distributes the funding as follows:

.

$11 million dollars for a regional alcohol treatment center and inpatient alcohol treatment

facility in Fort Sumner that will provide alcohol treatment services to Curry, De Baca, Gua-

dalupe, Harding, Quay, Roosevelt, San Miguel and Union counties, pay for the use of the fa-

cility, staff and operating expenses as defined in the bill, and provide for quality assurance

and evaluation services to monitor alcohol-related statistics; and

.

$11.5 million for intensive aftercare and transitional living programs to enhance programs in

Curry, De Baca, Guadalupe, Harding, Quay, Roosevelt, San Miguel and Union counties, in-

cluding a comprehensive alcohol treatment aftercare and follow-up program; a youth treat-

ment and aftercare program; a transportation system for treatment; a coordination, planning

House Bill 75 -- Page 2

and evaluation program to be administered by at least 2 representatives of the county health

and wellness councils of each county; a board of advisors that is not paid but will receive per

diem and mileage representing each county that will participate in alcohol prevention and

treatment-related programs; and quality assurance and evaluation services to monitor alco-

hol-related statistics.

Significant Issues

DOH notes a question exists as to whether an appropriation for the regional alcohol treatment

center and aftercare programs could be funded by an appropriation from the tobacco settlement

program fund. The appropriation identified in the bill is for a regional alcohol treatment center

with intensive aftercare and other related programs, and the intended appropriation of funds for

that purpose from the tobacco settlement program fund would be within the Legislature’s express

authority. There is, however, currently no mechanism by which monies from the tobacco settle-

ment permanent fund are appropriated or transferred to the tobacco settlement program fund.

Under NMSA 1978 § 6-4-9(B), beginning in FY03 and continuing through FY06, 100 percent of

the tobacco settlement program funds are required to be distributed to the general fund. It is not

until FY07 that any funds from the tobacco settlement general fund may be transferred to the to-

bacco settlement program fund, and even then the distribution is limited to 50 percent of the

money distributed to the tobacco program general fund.

In sum, although an expenditure from the tobacco settlement program fund of the type antici-

pated by the bill would likely be permitted by the language of NMSA 1978 § 6-4-9, there ap-

pears to be no statutory mechanism for funding the tobacco settlement program fund until FY07.

In short, because there appears to be no funds statutorily available from the tobacco settlement

program fund until FY07, there also appears to be no specific appropriation available to fund this

bill. The bill would necessarily be required to be funded by general fund monies.

If the intent is to appropriate the money from the permanent fund, it should be noted 6-4-9D

NMSA 1978 states, “The tobacco settlement permanent fund shall be considered a reserve fund

of the state and, as a reserve fund, may be expended in the event that general fund balances, in-

cluding all authorized revenues and transfers to the general fund and balances in the general fund

operating reserve, the appropriation contingency fund and the tax stabilization reserve, will not

meet the level of appropriations authorized from the general fund for a fiscal year. In that event,

in order to avoid an unconstitutional deficit, the legislature may authorize a transfer from the to-

bacco settlement permanent fund to the general fund but only in an amount necessary to meet

general fund appropriations.”

FISCAL IMPLICATIONS

The appropriation of $22.5 million contained in this bill is a recurring expense to the tobacco set-

tlement program fund. Any unexpended or unencumbered balance remaining at the end of fiscal

year 2010 shall revert to the tobacco settlement program fund.

ADMINISTRATIVE IMPLICATIONS

DOH indicates the bill would have little administrative implications for the department. The

funds would be passed through the department to the state entity that is chosen to coordinate care

in these eight counties. Oversight about quality of services provided and fiscal accountability

House Bill 75 -- Page 3

would remain as DOH responsibilities.

TECHNICAL ISSUES

HPC notes, to add clarity to the bill, the following terms could be defined: alcohol treatment cen-

ter and intensive aftercare and transitional living programs. Additionally, the bill does not spec-

ify what the alcohol related statistics will include, and it is unclear how the statistics will be col-

lected.

DOH states behavioral health services currently being provided will be transferred to the new

state entity chosen through the procurement process for the Behavioral Health Purchasing Col-

laborative. The collaborative mandates the state entity provide access to care through an inte-

grated, coordinated continuum of behavioral health services for eligible adults. This continuum

of care will include any services funded through this bill so that starting July 1, 2006, manage-

ment and oversight of these services will be provided by the state entity.

OTHER SUBSTANTIVE ISSUES

DOH notes New Mexico has among the worst alcohol-related health outcomes in the nation.

New Mexico’s death rate from causes directly associated with alcohol has been first or second

among the states, for each of the last 20 years (CDC Wonder). These deaths are considered to be

the outcome of chronic heavy alcohol use.

Additionally, according to the 2002 National Survey on Drug Use and Health, New Mexico

ranks 5

th

in the nation, overall, in “percent reporting that need but are not receiving treatment

services for alcohol use”. New Mexico ranks 10

th

in this category among both 12-17 and 18-25

year olds, and 5

th

among persons aged 26 and older (National Survey on Drug Use and

Health/Substance Abuse and Mental Health Services Administration).

The eight counties targeted by this legislation have a large range of direct alcohol-related death

rates. San Miguel and Union have the 2

nd

and 4

th

highest rate in the state, respectively. Other

counties affected are well below the state rate (Quay, Curry and Roosevelt), De Baca, and Hard-

ing have the lowest rates in the state (NMDOH’s 2004 Social Indicator Report).

DOH indicates it is not currently possible to assess unmet need for alcohol treatment services at

the county level. However, the eight-targeted counties have current alcohol treatment rates that

range from well above the state rate (San Miguel, Quay, Roosevelt) to well below the state rate

(DeBaca, Curry, Harding) (NMDOH Social Indicator Report).

The department states the bill also would require the residential and the after-care-transitional

living programs to perform quality assurance and evaluation services to monitor alcohol-related

statistics. The bill refers to “alcohol-related statistics” which may benefit from further definition.

Finally, the bill provides, within the appropriation, funding for a youth treatment and after-care

program. The state entity could consider funding a number of school-based behavioral health

service sites. Currently the Human Services Department and the Children, Youth, and Families

Department provide funding for substance abuse services for youth.

HPC collects Hospital Inpatient Discharge Data (HIDD) and indicates the following regarding

the 8 counties mentioned in this bill:

House Bill 75 -- Page 4

.

From the inpatient discharges recorded in 2000 HIDD, only 2 of the 8 counties exceeded the

statewide rate for patient days per 1,000 residents for the treatment of Drug & Alcohol De-

pendency (Annual Report of 2001 HIDD, NM Health Policy Commission).

.

From the inpatient discharges recorded in 2001 HIDD, only 3 of the 8 counties exceeded the

statewide rate for patient days per 1,000 residents for the treatment of Drug & Alcohol De-

pendency (Annual Report of 2001 HIDD, NM Health Policy Commission).

4 out of 8 of the counties mentioned in the bill exceeded the state mean average for DWI crashes

per 100,000 population for the year 2002 (Quick Facts 2004, NM Health Policy Commission).

HPC also indicates a previous analysis report (fiscal impact report) for similar bill (HB131) in-

troduced in 2004 legislative session states:

“DOH recognizes a shortage of substance abuse treatment funding for all levels of treatment ser-

vices and specifically states that there is an absence of alcohol residential treatment beds in the

northeastern area of New Mexico. The closest publicly funded residential treatment beds are in

Roswell, Carlsbad, and Albuquerque.

“However, the need for an alcohol treatment center operated in De Baca County may not be jus-

tified. According to the Office of Epidemiology of DOH, which maintains the state repository

and database for DWI offenders screened for alcohol/drugs, a total of 1747 DWI offenders were

screened from the eight county area mentioned above, during the period from July 1, 1999 to

June 30, 2002. Of that total screened, 104 or 6% were recommended for inpatient treatment ser-

vices, 819 (46%) were recommended for outpatient treatment services and 824 (47%) were not

recommended for any type of treatment services. DOH states that it might be more cost effective

to increase funding to those providers already providing residential treatment services in Ros-

well, Carlsbad, and Albuquerque, thus expanding treatment bed capacity.

“According to the Center on Alcoholism, Substance Abuse and Addictions at UNM, most studies

have shown no significant difference in the effectiveness between inpatient and outpatient treat-

ment in reducing recidivism of substance abusers. The cost of inpatient treatment however, is

significantly higher than that of outpatient treatment services.”

ALTERNATIVES

HPC indicates a statewide needs assessment could be performed to indicate which populations

could benefit most from the services provided in the bill. The bill, as written, would provide ser-

vices exclusively to residents of 8 mentioned counties. It could be revised based on the findings

of the assessment.

KBC/yr