Washington Gov. Jay Inslee is taking the first step toward a plan to help house and treat psychiatric patients who have been involved in the criminal justice system: a new, 500-bed state mental hospital.

Pre-design planning for the new hospital is included in Inslee's proposed budget for mental health over the next two years. That plan, released Tuesday, calls for the state to increase mental health spending by $675 million during the 2019-21 budget cycle. Construction on the hospital itself would begin in 2023 at an estimated cost of $528 million.

The new hospital, which would replace the 100-year-old Western State Hospital in Lakewood, would serve forensic psychiatric patients who are found not guilty by reason of insanity or who need competency evaluation and restoration services in order to face criminal charges.

"This is not a decision to move forward, but it is at least a way to look at some potential alternatives to replace some of those very, very aging buildings," Inslee said at a news conference to announce his mental health spending plan.

Inslee's proposal follows a request by Washington's Department of Social and Health Services to fund $800 million in the coming two-year budget to build a new hospital on the campus of Western State.

In June, Western State lost accreditation after a two-year turnaround effort and, with it, about $53 million a year in federal funding.

"We are trying to provide 21st-century medical care using a 19th-century model of care," Inslee said in a policy brief detailing his plans for the state's behavioral health system.

The state of Washington recently settled a class action lawsuit filed on behalf of inmates with mental illness who languish in jails awaiting competency services at the state hospitals. As part of that settlement, in what's known as the Trueblood case, the state has agreed to make sweeping upgrades to the state's forensic mental health system.

In the shorter term, Inslee is proposing to fund a series of initiatives designed to shore-up Washington's beleaguered mental health system and increase community-based services. Inslee's proposed two-year budget includes $404 million in additional mental health spending from the state's operating budget and $271 million more in the capital construction budget.

Among the spending items:

$40 million to expand community alternative placements such as state-operated living facilities

$35 million in rental assistance for an estimated 1,000 people, including patients being discharged from state hospitals

$30 million in community services such as intensive outpatient treatment

$4 million to address mental health workforce shortages, including five new psychiatry residency positions at the University of Washington

In addition, Inslee's budget proposes to begin to fund his previously announced five-year plan to move all civil, or non-criminal, patients out of Western and Eastern State hospitals.

To that end, Inslee wants to spend $145 million to add more than 500 community-based civil beds statewide. His capital budget also includes $31 million to begin designing a series of new, smaller state-run psychiatric facilities. This includes four 16-bed facilities, two 48-bed facilities and three 150-bed facilities at locations to be determined.

"Through a combination of mostly state-run options, we will be able to serve nearly all our civil patients in smaller facilities that are much closer to home and much more able to sustain the kind of supports that ensure patients get the right care at the right time," Inslee said in his policy brief.

In the meantime, Inslee's proposed budget also calls for spending $56 million on "building improvements and critical infrastructure" at Western and Eastern State hospitals designed to increase fire safety and reduce the chances of patients harming themselves or others. In recent months, three nurses at Western State Hospital have been hospitalized after being assaulted by patients.

In response to Inslee's budget proposal, Republican state Senator Steve O'Ban, whose district includes Western State Hospital, said he looks forward to working with the governor and majority Democrats on mental health funding in the 2019 session.

"I have been urging my colleagues and the governor to think of behavioral health policy and funding in the upcoming session as the next 'McClearly'-level priority for the Legislature," O'Ban said, referring to the McCleary school funding lawsuit which was recently resolved.

However, O'Ban cautioned against what he called "top-down, exclusively state-run facilities" and instead called for "innovative, regional solutions."

Since taking office in 2013, Inslee said the state has invested more than $500 million in additional state dollars for mental health. The state has also hired more than 500 additional staff and added 70 mental health treatment beds.

In 2015, 180,000 people received outpatient mental health services in Washington, according to the governor's office. Just over one percent of those individuals were admitted to a state hospital.

In October, Washington Senate Republicans proposed a series of mental health initiatives, including a $500 million voter-approved bond to pay for more community-based mental health facilities.

This story has been updated.