Sunday, January 20, 2008; B08

If Virginia legislators want to fix the state's mental health system, they will need to look beyond the $42 million in new revenue that Gov. Tim Kaine has proposed. Kaine noted at a news conference last month that his proposed increases would not pay for a much-needed system overhaul. But the governor warned that his offering was the best Virginia could expect because of a projected $618 million shortfall in state tax revenue.

That is not entirely true. The state could raise millions more by tapping into nontraditional sources.

Illinois recently added a $10 surcharge on all real estate document recordings to provide rent subsidies to poor people, including those with mental illnesses. The surcharge will generate $25 million a year. Although Illinois has a slightly more robust real estate market than Virginia, an identical $10 surcharge would raise only a few million dollars less -- money that could be earmarked for mental health.

California passed Proposition 63 to augment its mental health services. A 1 percent "Robin Hood" tax is levied on residents whose yearly income surpasses $1 million. For example, actress Angelina Jolie reportedly earned $27 million in 2004 and was required to pay $260,000. The surcharge has generated more than $1.8 billion in three years. While Virginia doesn't have as many movie stars, the state Department of Taxation reports that in the 2005 tax year, 7,732 returns were filed by households that listed their Virginia adjusted gross incomes as being in excess of $1 million.

A substantial boost in funds could be created by upping the state cigarette tax. Only four states have lower excise taxes on cigarettes than Virginia's fee of 30 cents per pack. In 2007, Maryland and the District assessed a dollar-per-pack tax, generating $200 million and $22 million, respectively. Maryland's tax rose to $2 a pack this year.

Redirecting funds from Virginia's criminal justice system into mental health also could help. The city of San Antonio shifted $1.7 million that it was spending on police, jail and court costs into a diversion program that put people with mental disorders into treatment programs instead of jail.

That shift reduced jail stays or prevented the incarceration of more than 1,700 people in 2003, saving Bexar County, Tex., which includes San Antonio, about $3 million. Kaine recognized the cost-saving potential of jail diversion by proposing $6 million in new funding for pilot programs in Virginia, including an innovative one in Fairfax County.

In the past, the governor and the legislature have found ways to finance programs they consider important. The Northern Virginia Transportation Authority was authorized last year to impose surcharges on road-related services, including a "congestion relief fee" of 40 cents per $100 of the assessed valuation on the sale price of a house. The fees and taxes are expected to generate $325 million per year in Northern Virginia for construction and maintenance of roads, Metro and railways.

The governor and state legislators have called repairing the state's mental health system a priority this session because of the murders at Virginia Tech last year. But the proposed $42 million in new spending over two years translates into less than $1 million per year for each slain student. The public and the victims of the Virginia Tech tragedy deserve better -- or at least as much consideration as road repairs.

-- Pete Earley

Fairfax

The writer is a member of a Virginia task force appointed by state Chief Justice Leroy Rountree Hassell Sr. to study the state's mental health system. He lives in Fairfax County and has an adult son with a mental illness.