Missouri child-care funding increases mulled

JEFFERSON CITY, Mo. -- A lot of attention has been paid to Gov. Jay Nixon's call to expand the state's Medicaid program for adults, but the governor's budget plan also includes increases in social welfare programs targeted at children.

Nixon's 2014 fiscal year budget seeks to increase reimbursement rates paid to foster parents and child-care centers that serve lower-income families while also expanding eligibility for subsidized day care.

The rate increases would benefit several thousand children at a significantly lower cost than the $900 million federal Medicaid expansion that is projected to cover an additional 260,000 lower-income adults. The prospects of Nixon's Medicaid expansion appear relatively bleak in the Republican-controlled Legislature. It's unclear whether lawmakers will go along with the proposed payment increases for children's services.

The payments to foster care providers help reimburse them for such things as food and clothing. Under Nixon's budget, these rates would increase by 3 percent, costing the state about $1 million in the next fiscal year.

The increase would give Missouri foster families with a child up to age 5 a $9 per-month increase, bringing their total subsidy up to $291 per month.

That still would fall far short of what is considered "adequate funding" for foster care, according to some estimates. A 2007 University of Maryland study concluded that Missouri's reimbursement rate would need to increase by 131 percent in order to completely cover the needs of a 2-year-old child. At the time the study was conducted, Missouri's foster care payment rate was the second lowest in the nation, behind only Nebraska.

"At least Missouri is making a step forward ... although it is not the percentages we would like to see, it is a start," said DeAnna Alonso, executive director of the Central Missouri Foster Care and Adoption Association.

The 2007 study found that Missouri's rate would need to jump up to $627 a month in order to provide adequate care.

"Providing for current and future families could encourage more families to take the licensing requirements," Alonso said.

The number of children in the state's foster care system has ballooned in recent years. In 2010, there were 14,776 children in state custody, but that number is projected to grow to more than 16,000 in the current year. The increase has forced lawmakers to boost funding for the system. Between 2011 and the current budget year, the program's funding has increased about $16 million.

"There seems to be a connection to the economic downturn and more kids going into the foster care system," state budget director Linda Luebbering said.

The governor's budget also proposes a 3 percent increase in the reimbursement rate to child-care centers that serve lower-income families, and it seeks to expand eligibility for the subsidized care. Luebbering said the budget plan would "reinvest" $11 million from the state's current program to provide a "transitional" benefit and raise the reimbursement rates.

Many members of the Senate Appropriations Committee were unfamiliar with Nixon's plan to expand the child care subsidies when it was outlined to them last week. Committee Chairman Kurt Schaefer, R-Columbia, said he found out about the proposal during a routine review of the proposed Missouri Department of Social Services budget. Some senators expressed concern about expanding the state's social welfare programs.

Missouri currently provides a full child care subsidy to families earning up to 122 percent of the poverty level. It also provides a transitional benefit for those earning up to 133 percent of poverty, or nearly $26,000 annually for a family of three.

Under Nixon's plan, the state would pick up 75 percent of the tab for the child care costs of parents who make between 135 percent and 150 percent of the federal poverty level. Missouri would also pick up half the cost for families earning up to 175 percent of the poverty standard, or about $34,000 for a family of three.

The expanded benefits would add about 3,000 children to the system.

Luebbering said this "stair-step" approach would allow people who start to earn more money to continue receiving some form of state child care benefits.