The Substance Abuse and Mental Health Services Administration on Tuesday night canceled some 2,000 grants representing nearly $2 billion in funding, according to an administration official with knowledge of the cuts who was not authorized to discuss them publicly.

The move pulls back funding for a wide swath of discretionary grants and represents about a quarter of SAMHSA’s overall budget. It immediately jeopardizes programs that give direct mental health services, opioid treatment, drug prevention resources, peer support and more to communities affected by addiction, mental illness and homelessness.

“Without that funding, people are going to lose access to lifesaving services,” said Yngvild Olsen, former director of SAMHSA’s Center for Substance Abuse Treatment and a national adviser at Manatt Health. “Providers are going to really need to look at potentially laying off staff and not being able to continue.”

Funding tied to agency’s priorities

SAMHSA, a sub-agency of the Department of Health and Human Services, notified grant recipients that their funding would be canceled effective immediately in emailed letters on Tuesday evening, according to several copies received by organizations and reviewed by The Associated Press.

The letters, signed by SAMHSA Principal Deputy Assistant Secretary Christopher Carroll, justified the terminations using a regulation that says the agency may terminate any federal award that “no longer effectuates the program goals or agency priorities.”

Grant recipients who were notified of the cancellations said they were confused by that explanation and didn’t get any further detail about why the agency felt their work didn’t match up with SAMHSA’s priorities.

“The goal of our grants is entirely in line with the priorities listed in that letter,” said Jamie Ross, CEO of the Las Vegas-based PACT Coalition, a community organization focused on substance use issues that lost funding from three grants totaling $560,000.

HHS didn’t respond to a request for comment on the funding cancellations, which were first reported by NPR. Two sources within SAMHSA who were not authorized to speak to media said staff weren’t widely notified of the agency’s action.

Programs at risk after funding is slashed

Organizations reeling from the news on Wednesday told the AP they had already been forced to cut staff and cancel trainings. In the long term, many were considering whether they could keep programs alive by shuffling them to different funding sources or whether they’d need to stop the services altogether.

Robert Franks, president and CEO of the Boston-based mental health provider the Baker Center for Children and Families whose organization lost two federal grants totaling $1 million, said the loss of funding will force his organization to lay off staff and put care in jeopardy for some 600 families receiving it. One of the canceled grants was awarded through the National Child Traumatic Stress Initiative, a more than 20-year-old program supporting specialized care for children who have been through traumatic events ranging from sexual abuse to school violence.

Franks said his organization’s work directly advances SAMHSA’s goals to address mental illness. He said trauma care provided to children through his organization helps people from all walks of life and reduces burdens on other parts of society.

“The reality is these programs are probably our most effective tool in addressing the issues that they identify as being critical to them,” he said. “Honestly, I don’t understand it.”

The National Association of County Behavioral Health and Developmental Disability Directors, a group that represents local organizations that deliver safety net services, sent a letter to its members on Wednesday noting that many of its partners estimated the funding pullbacks were focused on grants classified as Programs of Regional and National Significance. They also said the grants totaled around 2,000 and likely amounted to some $2 billion.

The group said it believed certain block grants, 988 suicide and crisis lifeline funding and Certified Community Behavioral Health Clinics were spared from the cuts.

For Honesty Liller, CEO of the peer support organization the McShin Foundation in Richmond, Virginia, the loss of about $1.4 million in funding is personal. She said the foundation she leads saved her life 18 years ago when she was struggling with a heroin addiction.

The terminated grant has already forced Liller to lay off five staff members. It will mean fewer peers are available to go into local jails and visit incarcerated people who are recovering from substance abuse disorder.

“They need hope dealers like us, they need people that have lived experience in recovery and they need this funding,” Liller said. “I’ve just never felt so gut punched.”