Only Mental hospitals didn't all close (spill) under Reagan. They have continually and steadily closed throughout the 1990s and 2000s, and continue to close today.

It's more like your one roommate spilled milk and then your other roommates all came in and knocked over more glasses of milk, and then nobody cleaned it up.

Haverford State closed in 1996, Allentown in 2010, Norristown continues to shrink.

It's not just the federal government either, state governments didn't (and don't) want to keep paying for these institutions. Since the advent of Psychopharmacology state hospital populations have continually shrunk since 1955 when hospital populations peaked (iirc give or take a few years).