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It is well known that today jails and prisons house many seriously mentally ill citizens who in prior decades have been treated in mental hospitals and community mental health programs. This paper begins with a brief review of the history of support for mental health programs at the federal level and then, using the State of Oregon as an example, describes the new state era of mental health services which is characterized by the increasing use of the criminal justice system as a cornerstone of the treatment of many seriously and chronically mentally ill individuals. Are there any solutions to our current dilemma? The paper ends with this question, and the reader must determine if any of the suggestions posed in this discussion are realistic and/or feasible given the current fiscal and political climate.