Gov. Sonny Perdue is scheduled to recommend a $8.4 million cut in funds for mental health services for children Thursday, just two weeks after federal investigators slammed the state's treatment of the mentally ill.

The money would be shifted from mental health services to other programs in the state Department of Human Resources to meet administrative expenses and cover funding deficits, according to copies of the proposal obtained by the Atlanta Journal-Constitution.

The proposal is one of several money shifts that will be presented to House and Senate leaders. The Fiscal Affairs Committee must approve funding transfers in state budgets that have already been approved by the General Assembly and signed into law by Gov. Sonny Perdue.

Some of the unspent mental health money would go to replace allocations that Georgia lost recently when the federal government tightened restrictions on funding state child welfare-related services. The rest would cover a deficit in child adoption services and pay higher worker's compensation premiums for mental health employees.

DHR Commissioner B.J. Walker said children, including those with mental health problems, would benefit from the transfer.

"I understand wanting to see resources in mental health. I understand the urgency we all feel about that. At the same time, people have to realize there are urgencies across the board" in caring for children.

The proposal upset mental health advocates.

"The need for mental health services for children in Georgia is so great that removing even a penny is inappropriate," said Ellyn Jeager of Mental Health America of Georgia.

Leaders of the Georgia chapter of the National Alliance on Mental Illness met with DHR officials Tuesday about the proposed transfer.

"We find it difficult to understand why the money can't be spent on mental health," said Eric Spencer, executive director of the alliance's state chapter. "We sympathize with the shortfall ... but we're surprised that the money is being taken from the one department that's under a Department of Justice investigation."

Rep. Mark Butler (R-Carrollton), House Appropriations vice chairman for Human Resources, said, "Taking any money out of mental health right now and shifting it to any other program that's not in mental health — I wouldn't characterize that as a good decision. Mental health needs every single dollar it's got."

And Rep. Judy Manning (R-Marietta), chair of a study committee on children's mental health, said, "We have a tremendous number of kids who need services."

Two weeks ago, the U.S. Department of Justice sent a scathing letter to Perdue about "critically deficient" conditions at the state mental hospital in Atlanta. Federal investigators listed 13 pages of necessary corrective action for Georgia Regional Hospital/Atlanta, including the hiring of medical and support staff members.

State officials have until late July to agree to major reforms or face a possible lawsuit.

The remedies, experts say, are likely to require a major infusion of funding, not just for hospitals but also for improving services for patients discharged from the hospital. Perdue's commission on mental health also has listed recommendations that would require new spending, including for detox centers and for case managers who would help guide the care of mentally ill individuals.

June DiPolito, director of a community mental health board in southeast Georgia, said that a state funding change has forced her to close six after-school programs for children with mental health problems.

"I have zero money for substance-abuse treatment for children," DiPolito added. "I hope DFCS' needs are met, but I hope it's not done with mental health dollars," she said.

Tom Ford, executive director of a state-funded board in northwest Georgia that delivers services to people with mental illness, said, "It's money we can use."

The shift in the state funding formula for mental health has meant fewer dollars for his and other community service boards across the state, he said.

The funding loss has forced the boards to cut the frequency of therapy visits for children with mental illness, Ford said. "We're seeing more kids, but with fewer staff."