Budget Cuts to Mental Health Services Threaten Livelihoods of the Disability Community

Funding shortages, eliminated services, and Medicaid changes have advocates worried

July 19, 2025

In northern Michigan, where community ties run deep and services for vulnerable populations often rely on shoestring budgets, recent cuts to mental health funding are shaking the foundations of organizations like Grand Traverse Industries (GTI), a nonprofit that offers “vocational training, employment, and habilitation services” to people with disabilities in seven counties.

The crisis stems from a significant budget shortfall at Northern Lakes Community Mental Health Authority (NLCMHA), which provides services to individuals with mental illness, intellectual and developmental disabilities, and co-occurring disorders across Grand Traverse and five other counties.

Per the NLCMHA website, “Northern Lakes CMH contracts with Grand Traverse Industries in Traverse City to provide Employment, Training and Personal Social services for persons with developmental disabilities to enhance social and daily living skills, work and productivity skills, attendance, stamina, and communication skills, along with many other skills necessary for community independence.”

At the center of the issue is a $9 million funding gap, which has led NLCMHA to approve a reduction of 27 staff positions in a move to contain costs. Though leadership insists that no services will be eliminated, families and service providers on the ground are deeply concerned about possible changes—especially to the popular program with GTI.

A Lifeline

For Patrick Korbel, a 43-year-old man with intellectual and physical disabilities, GTI is more than a workplace—it’s a lifeline. Living in a group home, Patrick is non-verbal, uses a wheelchair, and receives daily support for hygiene, medication, mobility, and communication. GTI’s day program provides him with routine, purpose, and a social circle that he cherishes. It also provides him with a paycheck. GTI employs Patrick in office, where he assists with administrative duties.

For families like the Korbels and individuals like Patrick—who has worked at GTI since 2008— the consequences of funding cuts could be life-altering.

“My parents and I are concerned that he could spend all day, every day at home. His job gives him dignity and a way to contribute to his community,” said Patrick’s sister, Kelly Busley, on the looming funding cuts. “There is so much loss that would happen if he was denied access to the state program. I’m not sure Patrick is even aware that this is something that could be coming to an end.”

Concerns about the reduction of programming at GTI in Traverse City surfaced due to upcoming changes at their Mancelona location. In Mancelona, GTI works with North Country Community Mental Health, which has required GTI to work with a subject matter expert from the Michigan Department of Health and Human Services to create a 12-month plan to transition their programming to a community-based model. This is expected to eliminate services in the Mancelona facility, including funding for those who would like to work at GTI to earn a paycheck.

“People are just now starting to talk about this publicly,” Busley tells us. “We’ve been attending board meetings, trying to get the word out. I feel helpless. It seems dire.”

She also notes that the Mancelona site is particularly vulnerable. “They’ve already announced a community-based model, but no one knows how that’s actually going to work.” Busley is concerned the same thing will happen in Traverse City, where Patrick works. “You hear people talk about how folks like Patrick should be out in the community, but it completely misses the point.”

A Step Forward

Northern Lakes CMH Interim CEO Curtis Cummins has acknowledged the urgency and severity of the situation. Staff reduction was the first step in bridging the funding gap.

“This is incomplete, and there is still work to be done,” Cummins says of the cost containment plan. “Our focus has been on reducing costs while having minimal impact on clinical services. GTI is a valuable partner of ours and the community. GTI should face no impact or reduction in services.”

Cummins emphasized that the agency is working on a 12- to 18-month plan to stabilize services, including streamlining operations and considering the return of residents placed in specialized downstate facilities.

He also confirmed that the agency served 5,769 individuals across its six-county region in fiscal year 2024, roughly 1 in 20 local residents.

A Logistical Challenge

For Cindy Evans, Executive Director of Grand Traverse Industries, the issue is both financial and philosophical. She struggles to wrap her head around the idea that a one-size-fits-all model could meet the individualized needs of people like Patrick.

“The elimination of the day program or a shift to all community-based services sounds nice in theory,” Evans said. “But as someone who works in the disability community, I understand that you can’t send everyone into the community based on their needs or desire to socialize. People need support, and sometimes, they need a place where they feel safe and understood.”

GTI has long prioritized inclusion and choice. “We’re deeply woven into the fabric of the community,” says Evans. “Our participants are not hidden away. They are out volunteering, working, engaging. But they also need a home base—a place where they can be among peers and thrive.”

Evans also highlights a logistical issue: In rural towns like Mancelona, options for true community integration are severely limited. “If I can’t have people work at our building, and I’m supposed to take everyone into the community, where exactly am I taking them? How do I staff it? How do I transport them? It’s nearly impossible.”

Even more troubling is that no one has asked for this change. “Nobody has said, ‘I don’t want to work; I’d rather volunteer,’” she explains. “We’ve built these programs around the actual needs of the people we serve.”

An Uncertain Future

While NLCMHA says essential services like crisis intervention and outpatient therapy will remain in place, the shift toward cost-cutting has rattled both families and providers. The potential for Medicaid rule changes and privatization of the mental health system looms, raising questions about the long-term viability of regional agencies like NLCMHA.

Both Cummins and Evans urge community members to get involved—starting by contacting northern Michigan lawmakers.

“People can let their representatives know they value funding for mental health services,” Cummins said. “They can oppose cuts to Medicaid and proposed plans to privatize the public mental health system. Joining advocacy groups like ProtectMIcare.org is one way to help.”

Speaking of Medicaid, the Michigan Department of Health and Human Services (MDHHS) has released proposed changes to Medicaid billing definitions, which would go into effect later this year. GTI advocates highlight some of these changing definitions as key drivers of service changes, noting that new wording could limit or even exclude the very people these policies are intended to help.

Public comment on the proposed changes is accepted through July 29, 2025. Visit michigan.gov/mdhhs/doing-business/providers/providers/medicaid/policyforms/proposed-medicaid-changes and navigate to the section titled 2507-BH, §1915(i) State Plan Home and Community-Based Services to learn more.

At the end of the day, Busley says advocacy isn’t optional—it’s a necessity.

“There’s a group of parents and guardians reaching out to state representatives. This isn’t just about Patrick. It’s about hundreds of people like him, who deserve dignity and community and support. … And we’re fighting to keep it that way.”