Three major cycles of reform in public mental health care--the moral treatment, mental hygiene, and community mental health movements--are described as a basis for assessing current fiscal policies in the mental health field. The authors argue that the incipient effort to create community support programs for the chronically mentally ill constitutes a fourth distinctive cycle of reform. They discuss legislative and administrative threats to the viability of this initiative, along with the necessity for developing financing mechanisms commensurate with the needs of the chronically mentally ill for long-term care.