Facing mandated budget reductions of $2.7 million, Moccasin Bend Mental Health Institute will cut 40 staff positions today and plans to close a 25-bed acute care wing on Monday.

Hospital officials hope increased funding to community-based services and new local programs for the mentally ill will help offset the cuts at the Chattanooga-based regional mental health facility, which serves 28 counties.

"We're just going to continue to work with the community to be sure people get the services they need," Superintendent William Ventress said.

Seventy-five acute care beds and 50 subacute, or long-term, beds will remain at Moccasin Bend after the reduction. Patients from the closed wing will be dispersed throughout the other units, Mr. Ventress said.

Only 29 of the 40 affected staff positions now are filled, and employees will receive notice today that their positions have been eliminated.

The state budget for fiscal year 2010 cut $37 million from the Tennessee Department of Mental Health and Developmental Disabilities, but it also provided $10 million in funding to bolster a "safety net" program for those who are poor, uninsured and severely mentally ill, said Sarah Lingo, communications director for the department.

Sita Diehl, a state advocate for the mentally ill, said she is "very grateful" for the additional money for community services but deeply concerned about cuts to the already strained state institutes.

"We would prefer people treated in the community than in the hospital, but we know there are times when people need the hospital (and) they need inpatient care," said Ms. Diehl, executive director for the National Alliance on Mental Illness in Tennessee. "The system itself is drastically underfunded and underresourced."

Statewide, the Department of Mental Health and Developmental Disabilities is eliminating at least 192 filled staff positions and 68 vacant positions at five regional mental health institutes, Ms. Lingo said.

Ultimately, 345 positions will be eliminated by the end of the fiscal year in July 2010, but budget officials do not know now how many of those positions will be filled or vacant, she said.

Moccasin Bend has made other changes in anticipation of budget cuts over the past year, including consolidating operations on its main campus by closing an 81-bed, long-term care unit called the Winston Building in October, Mr. Ventress said.

He said a new state law may ease the burden on state mental health hospitals but potentially shift that burden to other community resources, such as jails.

Previously, mental health institutes had to treat anyone who qualified for commitment, even if the facility didn't have a bed available, Mr. Ventress said. Under new legislation, facilities only have to take patients for whom a bed is available, he said.

If Moccasin Bend is full, personnel will contact other hospitals and resources such as Lakeshore in Knoxville or Parkridge Valley to get patients the help they need, he said.

A new local program for law enforcement officers may help avoid the imprisonment of people who should be served by mental health professionals, Mr. Ventress said. Officers are being trained to identify and work with mentally ill people they may encounter on the job.

Nationally, between 15 percent and 20 percent of incarcerated people are mentally ill, said G.A. Bennett, director of support services for the Hamilton County Sheriff's Office.