One month prior to the [1980 presidential] election, President Carter had signed the Mental Health Systems Act, which had proposed to continue the federal community mental health centers program, although with some additional state involvement. Consistent with the report of the Carter Commission, the act also included a provision for federal grants “for projects for the prevention of mental illness and the promotion of positive mental health,” an indication of how little learning had taken place among the Carter Commission members and professionals at NIMH. With President Reagan and the Republicans taking over, the Mental Health Systems Act was discarded before the ink had dried and the CMHC funds were simply block granted to the states. The CMHC program had not only died but been buried as well. An autopsy could have listed the cause of death as naiveté complicated by grandiosity.
President Reagan never understood mental illness. Like Richard Nixon, he was a product of the Southern California culture that associated psychiatry with Communism. Two months after taking office, Reagan was shot by John Hinckley, a young man with untreated schizophrenia. Two years later, Reagan called Dr. Roger Peele, then director of St. Elizabeths Hospital, where Hinckley was being treated, and tried to arrange to meet with Hinckley, so that Reagan could forgive him. Peele tactfully told the president that this was not a good idea. Reagan was also exposed to the consequences of untreated mental illness through the two sons of Roy Miller, his personal tax advisor. Both sons developed schizophrenia; one committed suicide in 1981, and the other killed his mother in 1983. Despite such personal exposure, Reagan never exhibited any interest in the need for research or better treatment for serious mental illness.

By the time Ronald Reagan assumed the governorship in 1967, California had already deinstitutionalized more than half of its state hospital patients. That same year, California passed the landmark Lanterman-Petris-Short (LPS) Act, which virtually abolished involuntary hospitalization except in extreme cases. Thus, by the early 1970s California had moved most mentally ill patients out of its state hospitals and, by passing LPS, had made it very difficult to get them back into a hospital if they relapsed and needed additional care. California thus became a canary in the coal mine of deinstitutionalization.
The results were quickly apparent. As early as 1969, a study of California board-and-care homes described them as follows:
These facilities are in most respects like small long-term state hospital wards isolated from the community. One is overcome by the depressing atmosphere. . . . They maximize the state-hospital-like atmosphere. . . . The operator is being paid by the head, rather than being rewarded for rehabilitation efforts for her “guests.”
By the mid-1970s, studies in some states suggested that about 5% of jail inmates were seriously mentally ill. A study of five California county jails reported that 6.7% of the inmates were psychotic. A study of the Denver County Jail reported that 5% of prisoners had a “functional psychosis.” Such figures contrasted with studies from the 1930s that had reported less than 2% of jail inmates as being seriously mentally ill. In 1973 the jail in Santa Clara County, which included San Jose, “created a special ward…to house just the individuals who have such a mental condition”; this was apparently the first county jail to create a special mental illness unit.
Given the increasing number of seriously mentally ill individuals living in the community in California by the mid-1970s, it is not surprising to find that they were impacting the tasks of police officers. A study of 301 patients discharged from Napa State Hospital between 1972 and 1975 found that 41% of them had been arrested. According to the study, “patients who entered the hospital without a criminal record were subsequently arrested about three times as often as the average citizen.” Significantly, the majority of these patients had received no aftercare following their hospital discharge. By this time, police in other states were also beginning to feel the burden of the discharged, but often untreated, mentally ill individuals. In suburban Philadelphia, for example, “mental-illness-related incidents increased 227.6% from 1975 to 1979, whereas felonies increased only 5.6%.”
The second half of the article details the 1980s when California’s deinstitutionalization endeavors went national. The entire piece is well worth the read.