In light of reduced or eliminated federal funding, this report discusses mental health services provisions. The history of mental health service funding is presented. Funding responsibility is traced from communities, to states, to private health insurance, to federal assistance, to community provision with state and federal funds, and finally to reduced federal involvement forcing greater state funding. Current mental health financing structure is discussed in these categories: (1) categoric service provision including state appropriations and state contracts; (2) benefit programs including Medicaid, Medicare, federal block grants, and private sector funding; and (3) cash transfers including Supplemental Security Insurance and social services Title XX block grants. Seven general legislative guidelines for states are presented. Particular state laws pertaining to mental health services are given. Six states' programs are briefly summarized. In a discussion of future trends and implications, efficient use of public and private sector resources and cost containment are emphasized. A case study of Oregon is presented. Thirteen references are listed. (ABL)