Actual expenditures for local mental health services in California from 1959 to 1989 are analyzed to determine trends in state funding of services. As the locus of authority for mental health services shifted from state to county governments, the relative share of state budget appropriations devoted to mental health steadily dwindled. Since 1973 the public mental health budget has declined by 11.8 percent, and in most years the percentage of state general funds allocated to mental health has decreased. Programs for the developmentally disabled, which are similar in scope and mission to those for the mentally ill but are both funded and directed by the state, have received consistently higher levels of funding. California's practice of decentralizing operating authority for mental health programs while retaining responsibility for funding is seen as detrimental to the quality of public mental health services.