Citing the need to bring a bloated budget back under control, interim Oklahoma Department of Mental Health and Substance Abuse Services Commissioner Greg Slavonic confirmed plans Tuesday for broad cuts to contracted services that would take effect Oct. 1.
According to an Aug. 27-dated document from a meeting with Oklahoma legislators, a line-item review of 573 ODMHSAS contracts indicates the agency plans full renewal for only 128 of the agreements. Another 122 contracts face reduced funding. Of the 573 contracts reviewed, 312 are designated not to be renewed at all. The document (embedded below) lists more than $40 million in “cost optimization” from the changes.
The contracts designated for partial or total cuts cover a broad spectrum of programming, including addiction services, adult mental health services, children’s services and criminal justice initiatives across Oklahoma’s array of service providers, including certified community behavioral health clinics, substance use disorder providers and recovery community organizations.
While Slavonic’s team presented the document during a meeting with some leaders of the Oklahoma Legislature last week, letters suddenly hitting the inboxes of service providers before a holiday has again surprised lawmakers, who have been trying to wrap their minds around ODMHSAS’ convoluted fiscal picture for months.
“At this point, I didn’t know that decisions had been made,” Rep. Mark Lawson (R-Sapulpa) said Tuesday. “I know that there’s been a lot of conversation between House members and Senate members since that meeting last week of what our expectations are. I don’t know that there is — well, there is no concerted plan at this time of next steps.”
Slavonic’s letters have given lawmakers one calendar month to decide whether to intervene. While Lawson acknowledged that ODMHSAS reviewing all contracts is “what we asked them to do,” he did not anticipate the non-renewals would finalized and announced within 48 hours of a handful of legislators being briefed by the agency.
“What has been sent to providers so far is news to me,” Lawson said. “It was, again, my understanding that they would consult the Legislature, since we’re out of session, if major changes were going to be needed mid-year, so that we could at least have the opportunity to discuss if we wanted to make supplemental appropriations or advise them to move forward with certain budget cuts.”
Zack Stoycoff, executive director of the Healthy Minds Policy Initiative, said “the need for mental health services is not shrinking, it’s growing” and that service providers were caught off guard to learn certain contracts would be reduced or not renewed next month.
“I think that’s pretty understandable when you get 30 days notice and you have to decide if you’re going to keep your doors open or not at the end of that period,” Stoycoff said. “I would say there’s a lot of surprise in the mental health community today, as providers are digesting that news.”
Stoycoff said many cuts were made to advocacy and training programs that “regular Oklahomans might not see an impact from right away.” Other cuts, however, will impact direct services to clients.
“I think what you’ll see is providers having to make hard decisions around, ‘Do we keep a service line, or do we terminate a service line, a certain program here or there, because the funding dried up?’ I think there will likely be some providers and organizations who will have to totally close their doors, particularly if they’re a smaller organization and their budget was really dependent upon funding from the state,” Stoycoff said. “Some of the larger organizations will certainly not close, but you may see them deciding whether to shutter a program or two.”
Slavonic: ‘More contracts than our budget can sustain’
Already, the leaders of smaller organizations are preparing for the worst.
Brandi Vore, executive director of the Oklahoma Citizen Advocates for Recovery & Transformation Association said the line-item cuts will “effectively shut down” her organization. As a recovery community organization, OCARTA deploys certified peer recovery support specialists to empower people who are in recovery from addiction, homelessness and other situations to work with those on their individual roads to recovery.
“[ODMHSAS] has issued notice of a 69.5 percent budget cut to OCARTA — totaling $639,614.50. This level of reduction will effectively shut down our organization, which operates recovery housing, peer support programs and rural expansion projects in four counties. Similar cuts are impacting other community-based providers,” Vore told NonDoc by email.
OCARTA served more than 3,000 Oklahomans last year, according to Vore, and the organization had 60 people achieve PRSS certification.
Vote reported being verbally notified Thursday of impending cuts before receiving a formal letter Friday afternoon — timing she felt was planned, owing to the impending holiday weekend.
“Eliminating funding at this scale will force closure of recovery housing beds, end community-based peer support programs, disrupt recovery supports in underserved rural areas and increase pressure on jails, hospitals and crisis centers,” Vore wrote. “These decisions directly affect thousands of Oklahomans in recovery, their families, and communities already struggling with addiction and mental health crises.”
Slavonic issued a statement Tuesday characterizing the cuts as difficult but necessary decisions.
“ODMHSAS has been operating with more contracts than our budget can sustain. I was tasked, by our governor and the Oklahoma Legislature, to guide this agency back to a balanced budget, while protecting essential services that directly support our mission to the people of Oklahoma. These were very difficult decisions, but we cannot spend more than we have,” he said. “I could not be prouder of this team for reviewing nearly 800 contracts line by line and making these tough decisions. We are committed to our state leaders, taxpayers, and most importantly the Oklahomans we serve, to provide quality care within our allocated budget.”
‘A little bit off guard’: House members react to ODMHSAS cuts
Service providers were not the only ones caught off guard by the cuts announced at the end of August. Some legislators, who anticipated reconvening for the 2026 regular session in February to determine the ODMHSAS’ official Fiscal Year 2026 needs, also expressed surprise.
“It did take me a little bit off guard, because it was my understanding we were not going to cut core services or cut any the services we’re currently rendering,” said Rep. Trey Caldwell (R-Faxon), who serves as chairman of the House Committee on Appropriations and Budget. “It was always my understanding that they were going to have to come back in February and get a supplemental (appropriation) and basically come back and be able to prove to us, ‘OK, these are the services we really need, this is the savings we’ve made from getting rid of certain administrative positions’ and stuff of that nature. I thought the cuts were going to be more predominantly focused on that and actually how they run the agency.”
Lawson, chairman of the special investigative committee formed in April to investigate ODMHSAS’ finances, said the Legislature essentially appropriated a flat FY ’26 budget for the agency in May with the knowledge it would have to provide supplemental funding come February. (Oklahoma’s fiscal years run from July 1 through June 30, meaning Oct. 1 marks the start of the second quarter.)
“The House’s position was essentially we knew that what we appropriated in FY ’26 was not something that we had extreme confidence in, and as the department continued to work through their budgetary woes, for lack of better words, that we just asked that they keep us apprised as they reach different checkpoints,” Lawson said. “If it means they need to amend some contracts or not renew contracts, to just advise us of their plan of action without springing the news on us, as it were, and it appears we’re kind of at that first checkpoint.”
Lawson said he has already received calls from concerned providers.
“I probably need to talk to some folks at the department as well, because it was not my understanding that letters [were] going out,” he said. “The Oct. 1 date, of course, is when all agencies have to submit their budget at the cabinet level, their executive budget. I was thinking there would be a little more time for the Legislature to deliberate, but it looks as though we’re going to move a little quicker, a little sooner.”
House Speaker Kyle Hilbert (R-Bristow) said during the spring regular session that his Republican Caucus had entered 2025 hoping to take a broad look at the delivery of mental health services in Oklahoma and examining how to improve processes and results. When then-ODMHSAS Commissioner Allie Friesen told legislative leaders in late February that she had identified a budget gap caused by year-to-year rollovers of reimbursement obligations, those questions became a crisis that defined much of the session and required a $27.4 million supplemental appropriation to avoid payroll default at the end of FY ’25.
After choosing to provide ODMHSAS the same original appropriation for FY ’26 that it received in FY ’25, legislative leaders publicly stated they would make final determinations on the agency’s needs next spring.
“In the interim, we are trusting that the governor’s new CPA there is going to be able to come back and give us a real number,” Caldwell said in May. “We expect to have some level of supplemental at the beginning of next year. But they have enough money to get there. Investigations are still ongoing.”
Two weeks later, however, both chambers of the Legislature voted to remove Friesen as commissioner, a decision that irked Gov. Kevin Stitt, who subsequently appointed Slavonic — a career military man — to lead a mental health agency he admittedly knew nothing about.
“This is really kind of an unknown territory for me,” he said. “But I was asked by the governor to come on board and try to steer the ship in the right direction, keep it afloat and then provide correction for the agency.”
Slavonic’s list of 300-plus ODMHSAS contracts up for non-renewal next month has put the ball back in the Legislature’s court, begging questions about whether lawmakers are comfortable with Stitt’s latest appointee to cut $40 million in state funding without an additional public hearing of the House’s special committee that pressed for answers in April and May.
Lawson said House fiscal staff has been reviewing the contract list provided by Slavonic at the Aug. 27 meeting, but he hinted that conversations could expand to “at least the select committee” about “what the department has identified as potential reductions.”
“I can’t speak for our caucus, let alone the entire House, on, ‘Would you want to cut these $40 million, or do we want to fund them?’ Like, what do we want to do?” Lawson posed as the $40 million question. “If we want to fund [those programs], it would require us to take some sort of action prior to February, especially if they’re sending out notices a couple days ago to providers saying that they’re not renewing these contracts.”
Lawson said he was “not surprised that we’re in this situation again.”
“We were never confident from the previous administration at the department to know what a good number was to provide the services that they were providing,” he said.
The question of what lawmakers want to do raises the specter of two dreaded words: “special session.” With Stitt broadly criticizing CCBHCs and other state contractors as having bloated budgets, he would seem unlikely to convene lawmakers to appropriate additional dollars. With legislators beginning to hear from mental health care providers in their districts again, a special session would require supermajority support from both the House and Senate.
Sen. Paul Rosino (R-OKC), Lawson’s Senate counterpart as co-chairman of the investigative committee, did not respond to a request for comment Tuesday. Neither did Caldwell’s counterpart, Sen. Chuck Hall (R-Perry), who serves as chairman of the Senate Appropriations and Budget Committee.
Asked by email Tuesday about reactions to the announced cuts, Jennifer Hogan, Slavonic’s director of communications, said legislative leaders had been briefed on ODMHSAS’ plans.
“We met with leadership in the House and Senate last week, walking them through our plan to bring stability back to the agency,” Hogan said.
Lawson confirmed he had met with ODMHSAS leadership, and he saw the spreadsheet designating the contracts the agency was intending to “renew,” “reduce” and “not renew.”
“They did give us a very high-level briefing of what they were reviewing. And I’m assuming this line-item checklist was — it was my understanding that that was essentially where they were heading,” he said.
Although she is not a member of the House’s special investigative committee, Rep. Suzanne Schreiber (D-Tulsa) has routinely expressed concern with how ODMHSAS has responded to its nebulous budget crisis. On Tuesday, Schreiber said legislators have a “responsibility” to convene before contracts are cut Oct. 1 because they adjourned in May with a goal of learning more before sweeping changes are made.
“My understanding was that we would maintain direct services until the next appropriations cycle,” Schreiber said. “I know my colleagues are equally concerned and are no doubt having conversations about this and will likely convene as a special committee to have these conversations and potentially think about what we can do before services are stopped Oct. 1. (…) We have a responsibility to have that conversation before those services end.”
Vore said Tuesday she has spoken to other organizations, such as Parents Helping Parents, that face the loss of all their state funding as a result of the announced cuts. She said ODMHSAS’ decisions make “no logical sense,” especially because she heard legislative leaders say that decisions about supplemental funding for ODMHSAS’ obligations would be made after the turn of the year.
“You’re going back and telling Legislature that, ‘Oh no, I’m sorry, the information that you were given wasn’t accurate about our budget needs when you gave us that flat budget and approved that. However, we don’t necessarily really know our budget needs just yet, but we do know however that we have to make these cuts to all these providers.’ And to me, that makes absolutely no sense,” Vore said. “Your whole point is, ‘Well, we looked at over 800 contracts, and we thoroughly looked over them, and we just wanted to make sure that the needs got met to the places that need it the most.’ And I’m thinking, ‘Well, who got to decide? Who got to decide who deserves to get what?'”
Stoycoff said ODMHSAS’ plan “goes in the bucket” of difficulties when it comes to accessing mental health care in Oklahoma, especially as providers brace for federal funding cuts.
“As we await the impact of the One Big Beautiful Bill and other federal cuts, we are continuing to deal with the Department of Mental Health budget crisis, and this is the next wave of that,” he said. “We’re going to see these state cuts, and then we will have ongoing cuts, very likely, from declining revenue sources from the federal government. (…) It’s just going to be more and more difficult to provide care in an environment where the need is ever-growing.”
Read the Aug. 27 ODMHSAS contract review list
