My mentally-ill mother-in-law wants to babysit

My mother-in-law is mentally ill. She has been for most of her life. She cuts herself. She has been in and out of psychiatric hospitals for about 40 years. She has voices in her head that tell her to cut herself. She has had multiple shock therapy treatments, and she's on enough medication to take down an elephant. Her parental rights for her two children were taken away from her when my husband was a boy—he is now in his late 30s. She doesn't even have custody of herself. She hasn't asked yet, but she has been insinuating that she wants to babysit my child. How do I go about saying no without creating an issue?