New York City will spend $130 million to reform the way its criminal justice system handles mentally ill inmates, as well as those consistently cycling in and out of prison.

The initiative was announced by the de Blasio Administration on Monday in an effort to reduce the number of mentally ill inmates in the prison system. The plan also includes way to reduce unnecessary arrests, and shifts punishment for minor crimes towards treatment instead of incarceration.

"For years, the criminal justice system has been the default for dealing with behavior and mental health issues, but that approach alone does not best serve public health or public safety," said Mayor Bill de Blasio.

According to the task force that made recommendations to the mayor's office, almost 40 percent of inmates in New York City jails have some kind of mental health problem -- and 7 percent suffer from very serious ones. And about 85 percent have substance abuse disorders.

The program will be funded by $90 million from City funds, and $40 million from asset forfeiture funds from the Manhattan District Attorney's office.

The plan will offer mental health screenings to people before they are arraigned, giving them a chance to avoid arrest and enter treatment programs. The plan will give wider access to health services for those in jail and offers community services -- such as help accessing Medicaid or the Human Resources Administration -- for inmates once they have been released from jail, to try to prevent future arrests and re-entry into the prison system.

Manhattan District Attorney Cyrus R. Vance, Jr. said high recidivism rates for those with mental health issues is unfair but has persisted for decades. The Task Force Report on Behavioral Health and the Criminal Justice System found a group of approximately 400 people had been admitted to jail more than 18 times in the last five years, and accounted for more than 10,000 jail admissions and a collective 300,000 days in jail during the period.

Additionally, the Department of Homeless Services will set aside another 267 housing slots to take the pressure off shelters and jails.

"This comprehensive plan to identify and divert individuals out of the criminal justice system and connect them with treatment and services to address their underlying issues will mean not only safer streets, but stronger neighborhoods and healthier people," said de Blasio in a statement.

The plan arrives as New York City looks for a way to effectively deal with the rising number of prison inmates who are mentally ill. Crime rates in the city have fallen sharply over the last two decades, but the percentage of prisoners who suffer from mental health or behavioral health issues continues to climb.

Part of the problem can be traced back to the Cuomo Administration and the New York State Office of Mental Health (OMH) plan to close many of the state psychiatric hospitals to replace them with 15 regional centers and local community-based facilities.

That plan saw the closing of the Kingsboro Psychiatric Hospital in Brooklyn, the closing of the Bronx, Mohawk Valley and Sagmore Psychiatric Centers and previous closings of Rockland, Pilgrim, Mid-Hudson, Hudson River, and Buffalo Psychiatric Center. New York went from 599 psychiatric beds per 100,000 citizens to 28 beds.

At the time of the closing of Kingsboro Psychiatric Hospital, in 2012, DJ Jaffee who runs the MentalIlnessPolicy.org said, "OMH is simply transferring the seriously ill to the criminal justice system."

Union groups were also outspoken about the closings because details were scant on how local community centers would be paid for and where people would go after leaving the existing centers.

"Once again, the Cuomo administration is purposely misleading the public about the impact of his policies by packaging his proposal with a nice-sounding name without providing any real detail about how services will be provided or supported," CSEA President Danny Donohue said in a statement reported by the Albany Times Union.

The hospital closings, which are nationwide, are leading to more mentally ill people being housed in jails. A report earlier this year said jails house 10 times as many people with such illnesses as state hospitals treat. In Riker's Island Prison, 40 percent of the inmates are mentally ill and the staff training is in adequate, the report found.

New York City settled a wrongful death lawsuit in November with Alma Murdough for $2.25 million for her son Jerome Murdough, a mentally ill homeless veteran, who was arrested for sleeping in the stairwell in a building on a cold February night. He was charged with trespassing and given a $2,500 bail which he could not afford and was sent to Riker's where a week later he died after being left unmonitored in his cell for hours. The story was broken by The Associated Press. By the time her son was checked on, the temperature in his cell rose to over 100 degrees Fahrenheit, and a supervisor said he essentially "baked to death."