Senate and House Subcommittees Approve DHS FY 2015 Budget

Full report in PDF

Appropriations subcommittees in both the Michigan Senate and House of Representatives have approved their versions of the Department of Human Services budget for Fiscal Year 2015, which begins on Oct. 1, 2014, and ends Sept. 30, 2015.

After years of declining investments, the DHS budgets approved by the House and Senate subcommittees further reduce total funding for DHS. The governor’s budget cut DHS by $397 million or 6.6% from the current year appropriation. The Senate subcommittee cut DHS by approximately 7% or $418 million, while the House subcommittee reduced funding by $436 million or 7.2%.

Reductions in spending partly reflect policy decisions that have made fewer families and children eligible for public assistance benefits, including lifetime limits on income assistance, and new asset tests for food assistance.

In the current fiscal year, the DHS budget is the state’s third largest, accounting for 12.3% of total spending from federal and state resources. Federal funds now account for more than 80% of DHS funding, up from 70% in Fiscal Year 2004. Other sources of revenue for DHS are state General Funds (17%); and state restricted, local and private funds.

DHS administers a range of services, including the Family Independence Program; the Food Assistance Program; State Disability Assistance; State Emergency Relief; and child protective, foster care, adoption and juvenile justice services. Decisions made by the Legislature will affect nearly 2.4 million Michigan residents—including over 1 million children—who receive some form of public assistance to help them hold low-wage jobs, feed and shelter their children, access healthcare, or survive when faced with serious illnesses or disabilities.

Income Assistance

Governor’s Budget:

  • Another deep reduction in funding for income assistance for families with children. The governor’s budget for Fiscal Year 2015 includes $151.6 million for the FIP program, a reduction of 29% from the amount appropriated in the current fiscal year ($214.3 million). The governor assumes that FIP caseloads will fall from 44,400 this year to 33,200 in 2015, a reduction of 25% in a single fiscal year.
  • Expansion of funds for out-stationed DHS workers. The governor recommends $19.3 million in federal, private and local funds to expand the number of out-stationed DHS workers by 150. With this funding, DHS would be able to expand the number of workers in hospitals, long-term care facilities, schoolbased centers or businesses that agree to pay a portion of the cost, using their contributions to draw down federal funding.
  • Continuation of the current Extended-FIP policy, which gives households leaving FIP due to earnings $10 per month in FIP assistance for six months. In 2011, when the state tightened its 48-month lifetime limit on FIP, those six months of very minimal assistance began to count against a family’s lifetime limit. The governor’s budget also removes language requiring DHS to notify persons eligible for Extended-FIP that receiving it will count toward federal and state lifetime limits.
  • Continuation of the current FIP children’s clothing allowance. The governor’s budget includes $2.9 million for the annual clothing allowance for children. The allowance was originally designed to make sure that school-age children have the opportunity to at least start the school year with a set of clothes. The program was restricted in 2011 to only those children in FIP cases that do not include an adult—e.g., children living with ineligible grandparents or other caregivers.

House Subcommittee:

  • The House subcommittee agrees with the governor’s recommended FIP caseload of 33,200, and total funding of $151.6 million.
  • The House subcommittee also allocates $2.9 million for the annual FIP children’s clothing allowance, but expands eligibility to all children ages 4 through 18.
  • The House subcommittee continues current policy of counting minimal Extended-FIP benefits against lifetime limits, but expands budget language requiring DHS to notify families of the effect on lifetime benefits on both the FIP application and the form that informs families of their eligibility.
  • The subcommittee agrees with the governor’s expansion of out-stationed workers, but transfers current DHS staff and funding, rather than increasing funding or the number of workers.

Senate Subcommittee:

  • The Senate subcommittee agrees with the governor’s projected FIP caseload of 33,200, a reduction of 11,200 cases monthly, reducing FIP funding by $62.3 million.
  • The Senate subcommittee adds budget language requiring DHS to report quarterly on: (1) the number and percentage of nonexempt FIP recipients who are employed; (2) the average and range of wages of employed FIP recipients; and (3) the number and percentage of employed FIP recipients who remain employed for 6 months or more.
  • The Senate subcommittee agrees with the governor’s expansion of out-stationed workers by $19.3 million and 150 full-time positions.
  • The Senate subcommittee agrees with the governor by continuing to count minimal Extended-FIP benefits against a family’s lifetime limits—affecting 1,105 families next year. The subcommittee retains the current requirement to notify families that Extended-FIP will count toward federal and state lifetime limits.
  • The Senate subcommittee includes new budget language requiring DHS to create a workgroup to determine how Michigan Works! job training programs can be revised to reflect declining FIP caseloads, including possible reductions in the amount of federal Temporary Assistance for Needy Families (TANF) funding that is provided to Michigan Works!

Food Assistance

Governor’s Budget:

  • A reduction of $444.5 million in FAP funding, to a total of $2.4 billion. The cut reflects the loss of federal ARRA funding as well as a projected drop in FAP households, from 894,750 this year to 890,000 in Fiscal Year 2015. Nearly 1.7 million Michigan residents received FAP benefits in January 2014, including over 700,000 children. Of those children, 242,408, or more than one-third, were under the age of 6.
  • Continuation of the optional state asset test for FAP benefits. Beginning in October 2011, DHS adopted an asset test for FAP eligibility that is not required under federal law. FAP households/groups must now have less than $5,000 in assets, including the value of vehicles after certain exemptions.
  • No resolution of the “Heat and Eat” provisions of the federal Farm Bill. The governor’s budget was released right before the Farm Bill was passed by Congress and therefore does not address federal cuts related to the “Heat and Eat” provisions of the bill. The Heat and Eat option, which has been utilized by 16 states including Michigan, allows states to use a standard utility allowance in determining food assistance benefits, including situations where eligible households receive a nominal $1 per year in energy assistance through the Low Income Health and Energy Assistance Program (LIHEAP). As a result, Michigan has been able to enhance the very modest Food Assistance benefits for some households, particularly important on the heels of a cut in benefits for all FAP recipients in November of 2013 due to the loss of funds from the American Recovery and Reinvestment Act.

Under the new Farm Bill, the nominal LIHEAP payment was increased to a minimum of $20 per years. Eight states, including New York, Pennsylvania, Connecticut, Rhode Island, Oregon, Montana, Massachusetts and Vermont have already announced that they will meet the new $20 minimum and continue current benefits for low income families, while two additional states and the District of Columbia are considering the change.

The House Fiscal Agency estimates—based on Fiscal Year 2010 data—that continuing the Heat and Eat option in Fiscal Year 2015 will require an additional $8.4 million in LIHEAP spending, but will prevent the loss of approximately $250 million in federal food assistance. Failure to raise the LIHEAP payment to $20 will result in the loss of $88 per month in food assistance for more than 235,000 low income families.

House Subcommittee:

  • The House subcommittee agrees with the governor on the projected FAP caseload of 890,000, as well as the loss of ARRA funding, resulting in a total cut in FAP funding of $445.5 million.
  • The House subcommittee also retains the FAP asset test.
  • The subcommittee’s budget bill does not address the “Heat and Eat” provisions of the federal Farm Bill.

Senate Subcommittee:

  • The Senate subcommittee concurred with the governor and the House on FAP caseloads and related funding.
  • The Senate subcommittee also retained the FAP asset test.
  • The subcommittee did not address the “Heat and Eat” provisions of the federal Farm Bill.

State Disability Assistance and Services

Governor’s Budget:

  • A reduction in funding for State Disability Assistance of 14%. The governor’s budget includes $17.9 million for the SDA, down from the $20.8 million appropriated in the current fiscal year. SDA caseloads have been decreasing since Fiscal Year 2010, in part because of efforts to ensure that SDA recipients who are eligible for federal Supplemental Security Income are transferred to that program.
  • A continued reduction in SDA cases. The governor assumes that the SDA caseload will also fall by 14% from the level budgeted in the current fiscal year, with total cases of 6,693 next year.
  • An increase in funding for Michigan Rehabilitative Services. The governor includes $4.4 million ($2.4 million in one-time funding) to allow DHS to draw down federal matching funds for rehabilitative services and avoid waiting lists.

House Subcommittee:

  • The House subcommittee agrees with the governor on a caseload of 6,693 for SDA, a reduction in funding of $2.9 million in state General Funds, and total funding for SDA payments of $17.9 million.
  • The House subcommittee includes only $2 million for Michigan Rehabilitative Services (down from the governor’s recommendation of $4.4 million), along with a $100 “placeholder” to ensure later budget discussions about the remaining $2.4 million that the governor designated as “one-time” funding.
  • The House subcommittee appropriates $1 million to expand a pilot project begun this year through the Centers for Independent Living, bringing total funding to $2.5 million. The goal is to develop accessible, comprehensive and coordinated services for persons with disabilities to improve financial self-sufficiency.

Senate Subcommittee:

  • The Senate subcommittee agrees with the governor’s overall reduction in funding for SDA payments from $20.8 million this year to $17.9 million in Fiscal Year 2015, as well as the projected SDA caseload of 6,693.
  • The Senate subcommittee agrees with the governor and expands funding for Michigan Rehabilitative Services by $4.4 million. In addition, the subcommittee adds $3 million to match $11.1 million in funding in the Department of Corrections to provide vocational and other services to persons with histories of probation and parole violations (not currently incarcerated), as well as those with severe mental health needs.
  • The Senate subcommittee also appropriates $1 million to continue and expand the Center for Independent Living pilot project.
  • The subcommittee includes new budget language that would limit the number of times persons could apply for disability assistance to two times per year—subject to federal approval.

State Emergency Services

Governor’s Budget:

  • Continuation of current energy assistance policies and appropriations. In addition to federal funding from the Low Income Home Energy Assistance Program (LIHEAP), in the past, Michigan received funds through the state’s Public Service Commission for energy assistance. After the courts ruled that the PSC did not have authority to collect restricted fee revenues, a decision that reduced funding by $60 million annually, the Legislature approved a new surcharge on electric meters to fund the Michigan Energy Assistance Program (MEAP). The MEAP was created in state law (P.A. 615 of 2012), and required DHS to establish a consolidated energy assistance program with a single, simplified application. For Fiscal Year 2015, the governor includes nearly $175 million in LIHEAP funding, as well as $60 million for the MEAP.
  • Continuation funding for State Emergency Relief services, including $13.6 million for local DHS office emergency services, $15.7 million for homeless services through the Salvation Army, $4.3 million for indigent burial services, $1.8 million for the Food Bank Council, and $3 million for multicultural services.

House Subcommittee:

  • The House subcommittee includes $165 million for LIHEAP—$10 million less than the governor—including approximately $85 million for home heating credits and $80 million for energy crisis assistance. The subcommittee used $10 million in federal LIHEAP to fund the MEAP, reflecting a statutory cap on the new surcharge of $50 million in collections, and bringing total spending for the MEAP in the House subcommittee budget to $60 million.
  • The House subcommittee concurs with the governor and provides $13.6 million for local office emergency services, $15.7 million for homeless programs, $4.3 million for indigent burials, $1.8 for food banks, and $3 million for multicultural integration funding and the Chaldean Community Foundation.

Senate Subcommittee:

  • The Senate subcommittee concurred with the governor, providing $175 million for LIHEAP, and $60 million for the MEAP.
  • The Senate subcommittee includes a $200,000 increase in funding for food banks, bringing total funding to nearly $2 million.

Child Welfare and Family Services

Governor’s Budget:

Foster Care and Protective Services

  • A slight increase in funding for foster care services. The governor recommends $190.3 million for foster care payments, up slightly from the $187.7 million appropriated for this year.
  • A small reduction in projected foster care cases. The governor cuts $2.4 million ($1 million state General Funds) to reflect a projected decline in foster care cases from 6,250 this year to 6,075 in Fiscal Year 2015. Foster care cases have been falling and, with the governor’s projections, will be down 43% between Fiscal Years 2005 and 2015.
  • Funding to pay 100% of private agency administrative rates. The governor includes a $5 million increase in funding to pay 100% of the private child placing agency administrative rate for new cases entering care. Those costs are currently split between the state and counties.
  • An increase of 4% in the County Child Care Fund. The governor includes $178 million for the Child Care Fund, an increase of 4% over the current year appropriation. The Child Care Fund provides for the care and treatment of delinquent or maltreated children who are court wards and not eligible for federal payments through Title IV-E. The primary sources of funding for the Child Care Fund are state General Funds (49.8%) and federal TANF (48.5%).
  • Increased funding for medical and psychiatric evaluations of abused and neglected children. The governor includes an additional $2.1 million for medical and psychiatric evaluations for children in the child welfare system, increasing total funding from $6.6 million to $8.7 million.
  • Funding to launch a new performance-based contracting model for child welfare services. The governor includes $1.4 million for the first phase of a new financing model for child welfare services.

Adoption Services

  • A small decrease in funding for adoption subsidies. The governor includes $241 million for adoption subsidies, a small decrease from the current year appropriation of $244 million. Subsidies are provided to families adopting children with special needs, and include both cash and medical subsidies for pre-existing medical or mental health conditions. Adoption subsidy average monthly caseloads increased by 11% between Fiscal Years 2005 and 2010, and have since stabilized at approximately 27,000. The major sources of funding for adoption subsidies are Title IV-E (46%), state General Funds (33%), and federal TANF (21%).
  • An increase in incentive payments for private agencies finalizing adoptions. The governor includes a total of $3.2 million—an increase of 5%—for private agencies that are placing children for adoption, including incentive payments to encourage more timely adoption turnaround times.

Family Preservation and Prevention

  • No reinvestment in prevention and family preservation services. The governor provides continuation funding for Strong Families/Safe Children ($12.35 million), Family Reunification ($3.98 million), and family preservation and prevention services programs ($2.5 million). Small cuts were made in the Families First program (from $17.2 million to $16.9 million), and the Child Protection and Permanency program ($13.2 million to $12.9 million). Total funding for family preservation and prevention programs fell from $60.6 million in Fiscal Year 2005 to $49.3 million in the current fiscal year—a reduction of nearly 19%, in the face of a 20% increase in the number of substantiated victims of child abuse and neglect.

Other Child and Family Services

  • An increase in funding for domestic violence prevention. The governor includes $514,200 for domestic violence prevention and treatment programs, increasing total funding from $15.2 million to $15.7 million.
  • Small increase in funding for juvenile justice reentry services. The governor recommends $800,000 for services for youths in the juvenile justice system to ease their re-entry into the community.
  • Funding for the Healthy Michigan Plan call center. The governor recommends $20.6 million (all federal funding) for a call center for Healthy Michigan Plan/Medicaid applicants and recipients.

House Subcommittee:

Foster Care and Protective Services

  • The House subcommittee recommends total funding for foster care payments of $188.4 million, slightly below the governor’s budget, but accepts the governor’s estimated foster care caseload of 6,075, at a projected cost of $28,061 per case for the year.
  • The House subcommittee increases the Child Care Fund to $185.2 million. The subcommittee agrees with the governor to pay 100% of the private agency administrative rate for new cases next year (rather than splitting costs with the counties), but appropriated those funds to the Child Care Fund, rather than to the foster care portion of the budget.
  • The House subcommittee includes the governor’s recommended increase in funding for incentive payments for private agencies that finalize adoptions in a timely manner ($3.2 million).
  • The subcommittee revises the goal limiting the number of children in foster care for longer than 24 months from 31% to 25%.
  • The House subcommittee appropriates an additional $3.7 million to increase rates paid to private agency residential care providers by slightly over 2%—provided the county match rate is eliminated for the increase.
  • The House subcommittee agrees with the governor to fund the launching of a new performance-based contracting model for child welfare services. In addition to the $1.4 million provided by the governor, the subcommittee provides $100,000 for a technical assistance contract for Kent County—the first county to pilot the new financing approach. Under the subcommittee bill, Kent County would privatize all foster care and adoption services (not child protective services) by Oct. 31, 2014, with performance-based funding in place at that time.
  • The House subcommittee accepts the governor’s proposed increase in funding (additional $2.1 million) for medical and psychiatric evaluations of abused and neglected children.

Adoption Services

  • The House subcommittee agrees with the governor on the projected adoption subsidy caseload of 26,800 at an estimated cost of $732 per month per case, as well as total spending for the program of $241.1 million.
  • The House subcommittee added budget language prohibiting DHS from using the income of the adoptive parent in determining eligibility for adoption support subsidies.
  • The House subcommittee adds $1 million for a “Parent to Parent” program to provide support for adoptive parents.

Family Preservation and Prevention

  • The House subcommittee concurs with the governor’s recommendation on funding for family preservation and prevention programs, with continuation funding for Strong Families/Safe Children, Family Reunification, and family preservation and prevention services programs, as well as small cuts in the Families First and Child Protection and Permanency programs.

Other Child and Family Services

  • The House subcommittee allocates $3 million for before- and after-school programs, as well as $500,000 for a school success partnership program through the Northeast Michigan Community Services Agency.
  • The House subcommittee approves the governor’s recommendation of $800,000 for services for youths in the juvenile justice system to ease their re-entry into the community.
  • The House subcommittee cuts $8.2 million ($3 million in state General Fund) by closing the Maxey Training School for delinquent youths, transferring those youths to other facilities.
  • The House subcommittee also approves $20.6 million in federal funding for the Healthy Michigan Plan call center.
  • The House subcommittee accepts the governor’s proposed increase in funding for domestic violence and prevention services.
  • The House subcommittee approves $350,000 for the Michigan Reading Corps to provide literacy services and tutors for students in kindergarten through third grade who are identified as being at risk of reading failure.

Senate Subcommittee:

Foster Care and Protective Services

  • The Senate subcommittee agrees with the governor on foster care caseloads and costs, projecting a decline in foster care cases to 6,075 next year, and a total reduction in related foster care costs of $2.4 million.
  • The Senate subcommittee agrees with the governor on a nearly $7 million increase (4%) in the County Child Care Fund, with total funding of $178 million.
  • The Senate subcommittee agrees with the governor’s recommendation to allocate $1.4 million for the new performance-based contracting model for child welfare services.
  • The Senate subcommittee increases funding for medical and psychiatric evaluations of children in the protective services and foster care systems by $2 million over the governor’s recommendation (an increase of $2.1 million), bringing total funding up to $10.7 million—up nearly 63% from the current fiscal year.
  • The Senate subcommittee agrees with the governor in approving a $5 million increase in funding to pay 100% of the private child placing agency administrative rate for new cases entering care.
  • The Senate subcommittee includes $300,000 to cover the costs foster parents incur in transporting their foster children to parent-child visitations.
  • The Senate subcommittee revises budget language to change the goal of limiting the number of children in foster care for longer than 24 months from 31% to 30%.
  • The Senate subcommittee adds new budget language requiring DHS to set clear policies for parent-child visitations, including written plans with a minimum of 3 hours per child per week.

Adoption Services

  • The Senate subcommittee concurs with the governor and includes $241 million for adoption subsidies, a decrease of $2.9 million from the current year based on a projected drop in the caseload of 350 cases to 26,800.
  • The Senate subcommittee increases funding for incentives payments for private agency adoptions by only 3.3% (compared to the 5% recommended by the governor), for a total increase of $2.2 million.
  • The Senate subcommittee includes $18.8 million to allow adoptive parents to claim enhanced payment rates for children who had special needs that existed at the time of adoption, but were not identified until later. Adoptive parents would be allowed to receive the enhanced rate one time for any eligible child from birth to age 18. This recommended change is in response to complaints filed by adoptive parents claiming that they were not notified that their adopted children had special needs, and includes physically disabled children needing greater supervision and care, as well as children with special mental health needs, requiring special diets, or with antisocial behaviors.
  • The Senate subcommittee includes budget language prohibiting DHS from negotiating adoption subsidies that are below the standard payment for foster care.

Family Preservation and Prevention

  • The Senate subcommittee concurs with the governor’s recommendation on funding for family preservation and prevention programs, with continuation funding for Strong Families/Safe Children, Family Reunification, and family preservation and prevention services programs; and small cuts in the Families First and Child Protection and Permanency programs.

Other Child and Family Services

  • The Senate subcommittee agrees with the governor’s recommended increase in funding for domestic violence prevention and treatment.
  • The Senate subcommittee includes $125,000 in state funds to match federal funding for the Michigan Reading Corps—for the purpose of literacy and tutoring services for children in kindergarten through third grade—as well as $300,000 to expand the School Success Partnerships program to four new counties through the Northeast Michigan Community Services Agency.
  • The Senate subcommittee includes $2.9 million for a database to track youths in the juvenile justice system.
  • The Senate subcommittee includes $500,000 to expand grants to rural communities to fund new and expanded in-home juvenile justice programs, bringing total funding to $1.5 million.
  • The Senate subcommittee includes the governor’s proposed increase in funding for juvenile justice reentry services of $800,000.
  • The Senate subcommittee includes funding for the Healthy Michigan Plan call center ($20.6 million in federal funds).

The kids are not all right

Whatever economic recovery has occurred in Michigan, it has not reached children and their families. Poverty continues to affect one of every four of the state’s youngsters. Over half a million of the children in Michigan lived in families with income below the federal poverty level ($18,000 for a single parent family of 3 and $22,000 for a family of four), according to this year’s annual Kids Count in Michigan overview of child well-being.

Economic security weakened in almost every county between 2005 and 2011, and the more affluent counties experienced the steepest increases: Oakland, Ottawa and Macomb counties saw their child poverty rates almost double over the trend period. (more…)

Ten steps to boost Michigan’s economy

new report by the League outlines 10 steps Michigan must take to improve its economy, refuting the myth that tax cuts are a shortcut to economic prosperity. Included in the report are strategies for investing in the services and infrastructure needed to create jobs and fuel economic growth, as well as tax changes that modernize and strengthen the state’s revenue system.

It is an agenda for long-term economic prosperity that includes investments in education from early childhood through higher education, access to the health and mental health services needed for a healthy workforce, basic income security for those who cannot work or find jobs, and support for the community services businesses and consumers rely on. (more…)

KIDS COUNT: First eight years

Legislation gaining attention in Lansing would force third-graders behind in reading to redo a grade. A new KIDS COUNT policy report out today offers some better options.

Michigan policymakers are addressing the importance of investing in early childhood by expanding the state-funded preschool program for 4-year-olds, a key recommendation in the report, The First Eight Years: Giving Kids a Foundation for Lifetime Success, by the Annie E. Casey Foundation. But the administration and Legislature fall down on another important recommendation: Support for low-income families. (more…)

Michigan House and Senate Reach Agreement on the FY 2014 Human Services Budget

 Full report in PDF

On Tuesday, May 28, the joint House/Senate Conference Committee for the Department of Human Services approved its Fiscal Year 2014 budget for the DHS. The DHS conference report was subsequently approved by the full House of Representatives as part of HB 4328, an omnibus bill that includes the budgets for all state departments and services except higher education, community colleges and K-12 School Aid. A vote by the full Senate is expected in the coming week. Agreements reached by the joint House/Senate conference committees can be either approved or rejected by the full House and Senate, but cannot be amended on the floor.

After years of declining investments in human services, the final DHS budget agreement cuts spending by 10.2%, or $685.7 million. The deep cuts in DHS public assistance programs have largely been the result of recent policy decisions that limit eligibility, including a new asset test for food assistance, and more stringent enforcement of lifetime limits on income assistance—both adopted in 2011.

What is most unacceptable about the cuts in public assistance is that they come at a time when poverty is increasing, and unemployment—while dropping from peak levels—remains high. Further, many of the jobs that are being found are low wage, making it increasingly difficult for workers to support their families.

Exacerbating the problem have been recent tax policy changes that have increased taxes for low-income working families, further whittling away their wages. In 2011, Michigan lawmakers approved a major overhaul of Michigan’s tax system that cut business taxes by $1.8 billion, financed through tax increases on moderate- and low-income workers, as well as pensioners.

As part of that tax shift, lawmakers reduced the state’s Earned Income Tax Credit by 70%—from 20% of the federal credit to just 6%. The EITC is a proven tool for keeping children and families out of poverty and has been shown to increase employment and reduce the need for public assistance. It is estimated that a 20% credit kept 14,000 children out of poverty in Michigan. At 6%, an estimated 5,000 children will be kept out of poverty, leaving another 9,000 children behind.

BACKGROUND ON THE DHS BUDGET

The DHS budget is the third largest in Michigan, accounting for 13.5% of total spending from federal and state sources this year. The DHS administers a range of public assistance, child welfare and adult services at a cost of approximately $6.7 billion in the current fiscal year. Included in the DHS budget are funds for the Family Independence Program; the Food Assistance Program; State Disability Assistance; State Emergency Relief; and child protective, foster care, adoption and juvenile justice services.

TOTAL FUNDING

Governor: The governor’s proposed DHS budget included a 9.8% cut in total spending, for a reduction of over $658.3 million. State General Funds dropped by $15.7 million or 1.5% in the Governor’s budget.

Conference: The Conference Committee reduced the DHS budget by 10.2%, from $6.7 billion in the current fiscal year to $6.02 billion—a reduction of $685.7 million.

THE FOOD ASSISTANCE PROGRAM

FAP (formerly called the Food Stamp program) is completely federally funded, with an average monthly benefit for a twoperson household of $267. Over 70% of FAP recipients receive no other state cash assistance. With increasing unemployment and need between fiscal years 2004 and 2011, caseloads grew by 135%. Since that time, in part due to state policy changes limiting eligibility, caseloads have begun to drop.

Key among those changes was the adoption in 2011 of a limit on FAP assets. Families must now have less than $5,000 in total assets, including the value of vehicles after certain exclusions, in order to receive food assistance. This asset limit resulted in less access to assistance for low-income families and individuals, and caused the state to turn away federal funds available to assist low-income families.

Governor: The governor’s budget reduced funding for FAP by $683.7 million in recognition of the loss of federal funds from the American Reinvestment and Recovery Act as well as caseload reductions. The governor’s budget assumed that FAP caseloads would fall from 1.1 million cases appropriated this year, to 876,650 in Fiscal Year 2014—a 19.4% reduction. The actual average monthly FAP caseload through April of this year is much lower than appropriated at 912,339.

Conference: The Conference Committee adopted the governor’s caseload projections.

FAMILY INDEPENDENCE PROGRAM:

FIP provides cash assistance to low-income households with dependent children. To be eligible for FIP, an average family of three must have an annual income of less than $9,800, and financial assets of less than $3,000. The maximum benefit for a family of three is $492 per month. Approximately seven of every 10 FIP recipients are children, and 60% of those children are under the age of 9. FIP caseloads have been declining dramatically in recent years, in large part the result of policy decisions, including the adoption in 2011 of changes in lifetime limits for assistance. Total FIP spending is estimated to be $255.3 million in the current fiscal year.

As part of federal sequestration, the Administration chose to eliminate the annual clothing allowance for approximately 30,000 children receiving FIP in cases that do not include an eligible adult—the only direct client grant reduction. Since 1999, Michigan has provided at least some children receiving FIP an annual clothing allowance—in recognition of the reality that the failure to raise public assistance grants has reduced their value to less than one-third of the federal poverty threshold. At its peak, more than 150,000 children were provided a back-to-school clothing allowance. In 2011, the program was restricted to children in FIP cases that do not include an adult, leaving behind more than 120,000 children.

Governor: The governor’s budget reduced funding for FIP by $15.8 million to a total of $239.4 million to reflect continued reductions in caseloads. The governor projects FIP caseloads will fall from 53,298 in the current year to 49,226 in Fiscal Year 2014—a reduction of 7.6%.

Conference: The Conference Committee:

  • Reduced expected cases and funding for FIP based on May caseload estimates. The Conference Committee projects that there will be a total of 45,710 FIP cases in FY 2014.4 The DHS reports that the average monthly caseload for the FIP program fell from 83,507 in Fiscal Year 2011 to 55,971 in April of this year.5
  • Provided $2.9 million to restore the clothing allowance in the 2013-2014 school year, retaining the restriction that only children in FIP cases without an eligible adult can receive the assistance.
  • Did not fund a new substance abuse screening and testing pilot for FIP applicants and recipients in at least three counties, as proposed in HB 4118.

STATE DISABILITY ASSISTANCE

The SDA, which is a state-funded program, provides cash assistance to disabled adults who have annual incomes below $5,400. The payment level for a single adult is $269 monthly. With the adoption of the Conference Committee report, funding for SDA will be down 39% since 2010.

Governor: The governor recommended a decrease of $546,600 (all State General Funds) to reflect an anticipated drop in the number of SDA cases from 8,777 this year to 8,600 if 2014—a reduction of 2%.

Conference: The Conference Committee further reduced expected SDA cases to 7,777 based on the May Revenue Estimating Conference consensus caseloads—a reduction of 11% below the current fiscal year, and 9.6% below the governor’s recommended caseload.

STATE EMERGENCY RELIEF AND LOW-INCOME ENERGY ASSISTANCE

DHS assists low-income individuals and families facing emergencies that threaten health and safety. Through a combination of direct financial assistance and contracts with a network of nonprofit organizations such as the Salvation Army and local Community Action organizations, low-income households can receive assistance with emergency housing, utility shut-offs, home repairs, relocation assistance and burials.

For energy services, families must have incomes below 150% of the federal poverty level; for non-energy services, a family of three must have an income of $625 per month or less. Families with cash assets over $50 must pay toward the emergency, and the value of non-cash assets cannot exceed $3,000 for a family of two or more.

Governor: The governor included a total of $235 million in federal and state restricted funds, including $175 million in federal Low-Income Home Energy Assistance Program funds, and $60 million in new state restricted funds for a Low-income Energy Assistance Fund—in response to a new state law (P.A. 615 of 2012) requiring DHS to establish a new consolidated energy assistance program with a single, simplified application. Revenues for the Low-income Energy Assistance Fund would be collected through the Department of Licensing and Regulatory Affairs and administered by DHS.

Conference: The Conference Committee agreed with the governor and provided $60 million in restricted funds for energy assistance.

CHILD WELFARE SERVICES

A range of child and family services programs are funded through the DHS, including protective services to investigate charges of child maltreatment; foster care services to supervise and place children who cannot remain safely in their homes because of child abuse and neglect; adoption subsidies, including financial and medical subsidies to families who adopt children with special needs; and family preservation and prevention services. In addition, DHS works in partnership with counties to fund services for delinquent and maltreated children and youths through the Child Care Fund.

While funding for some child welfare services has increased in recent years as a result of litigation against the state for its failures in meeting the needs of abused and neglected children, funding for services to prevent maltreatment, and to strengthen and reunify families, continues to be woefully inadequate.

FOSTER CARE SERVICES

Governor: The governor’s budget included $190.8 million for foster care payments, a cut of $15 million (7.3%). The current year budget includes $205.8 million for foster care payments, with a caseload of 7,200. The governor projected that the Fiscal Year 2014 caseload would be 6,650.

Conference: The Conference Committee included $181.1 million for foster care payments, a reduction of 12% over the current year, and 5% below the governor’s recommendation for Fiscal Year 2014. The Conference Committee projects that foster care caseloads will fall to 6,250. The Committee also increased foster care administrative rates for private child placing agencies by $3 to a total of $40 per child per day.

ADOPTION SUBSIDIES

Governor: The governor projected that adoption subsidy caseloads would increase slightly from 26,850 to 27,100 monthly, an increase of approximately 1%.

Conference: The Conference Committee assumes an adoption subsidy caseload of 27,150 in Fiscal Year 2014. The Committee also included $28 million for a $3 per child per day rate increase for all adoption subsidy cases. The current year budget had included funding for a $3 per day increase only for current foster care parents and new adoption subsidy cases. As a result of a legal opinion that DHS could not exclude current adoption subsidy cases from the increase, the higher rate was implemented in October of 2012 for all adoption subsidy cases, resulting in a budget shortfall of approximately $28 million. The Conference Committee rejected $2 million previously added by the Senate to allow adoptive parents to claim an additional subsidy if they discover that their adopted child has additional special needs after the adoption is finalized.

CHILD WELFARE STAFFING ENHANCEMENTS

Governor: The governor’s budget included funding to continue to expand the number of child welfare workers in order to comply with a settlement agreement resulting from a lawsuit by Children’s Rights, Inc., a national advocacy organization. The lawsuit claimed that DHS was unable to move children quickly into safe, stable and permanent homes, provide children with adequate services, provide safe and stable foster homes, or prepare children who “age out” of the child welfare system. To address the settlement, in May of 2012, the governor requested a total of 577 new workers for the current fiscal year (FY 2013). The governor’s Fiscal Year 2014 budget revises the total number of child welfare enhancement staff needed to 496 (a cut of 81 FTEs), the majority of which are protective services workers. Overall, the governor’s budget includes funding for a total of 3,940 child welfare workers statewide.

Conference: The Conference Committee cut the number of new child welfare workers by an additional 80 positions, for a total cut of 161. This was substantially less than the cuts previously passed by the House, which cut an additional 151 positions above the governor’s recommendation, and the Senate, which reduced child welfare staffing by an additional 223 positions.

CHILD CARE FUND

Governor: Based on current spending trends, the governor’s budget provided $177.5 million for the county Child Care Fund, a reduction of $11.1 million or 6% from current year expenditures of $188.7 million. The Child Care Fund provides for the care and treatment of delinquent or maltreated children who are court wards and not eligible for federal payments through Title IV-E. The primary sources of funding for the Child Care Fund are state General Funds and federal TANF.

Conference: Based on the May 15th consensus agreement, the Conference Committee provided $171 million for the Child Care Fund. Included in the Conference Committee budget is $5.1 million for an increase of $3 per child per day for private child placing agencies, as well as a cut of $11 million as a result of DHS audits of Child Care Fund claims made by counties to identify improper claims. The Senate also added $1.5 million for counties to expand their in-home, community-based juvenile justice programs.

PREVENTION SERVICES

Governor: The governor provided largely continuation funding for Families First ($18.0 million), Strong Families/Safe Children ($12.4 million), Child Protection and Permanency ($16.8 million), and the Family Reunification Program ($4 million). The governor also allocated $2.5 million in one-time funding to expand the Families Together Building Solutions program to Macomb and Muskegon counties, and to expand the Supportive Visitation/Home-Based Parent Education program to additional counties.

Conference: The Conference Committee:

  • Rejected the governor’s $2.5 million expansion in one-time family preservation funding.
  • Further reduced funding for family preservation programs by $4.2 million, including cuts in Families First, Child Protection and Permanency, and family reunification.
  • Cut funding contracts for runaway youth services by 10% in order to partially offset costs related to the adoption subsidy shortfall.
  • Provided $2.5 million in federal funds for pilot programs in Kalamazoo, Macomb and Muskegon counties to prevent children from birth through age 5 from entering foster care.

 ENDNOTES

1. The Child Development and Care program is now funded through the Michigan Department of Education budget.
2. The Medicaid program is funded through the Department of Community Health budget.
3. The total unduplicated count takes into account individuals that receive more than one public benefit (e.g., are eligible both for the Family Independence program and Medicaid).
4. Summary of FY 2013, 2014, 2015 Consensus Agreement – May 10, 2013, Department of Human Services – Major Spending and Caseload Programs, Fiscal Year 2014, State Budget Office (total FIP caseloads includes Extended FIP benefits and Short Term Family Support).
5. Total Cases, Recipients and Payments for FIP, FAP, SDA, CDC and SER Benefits Trend Information, Fiscal Years 2011, 2012 and 2013, Green Book Report of Key Program Statistics, Michigan Department of Human Services. Fiscal Year 2013 is an average monthly year-to-date through April of 2013.

An opportunity we can’t afford to waste

Last week’s Revenue Estimating Conference—the second meeting this year of the state’s best prognosticators on the ups and downs of Michigan’s economy and related tax revenues—brought some good news: Revenues are higher than expected.

Michigan, like other states around the country, has turned the corner following the national Great Recession, and revenues are inching up while unemployment slowly falls. The new revenue consensus by state fiscal experts is that Michigan will have an additional $702 million in combined revenues above earlier estimates for fiscal years 2013 and 2014—including a total of $579 million in state General Funds, and $123 million in the School Aid Fund.

(more…)

Law enforcement leaders: Expand Medicaid eligibility

Fight Crime: Invest in Kids Michigan has issued a letter, signed by 50 Michigan law enforcement leaders, strongly supporting Gov. Rick Snyder’s proposal to accept federal funds to expand Medicaid to low-income, uninsured citizens with incomes up to 133% of the federal poverty level.

In their letter, they cite numerous benefits to providing coverage including:

  • Treatment of  mental health problems and substance abuse reduces crime;
  • A greater likelihood that kids are insured when parents are insured;
  • Reduction of child abuse and neglect through comprehensive mental health services for parents;
  • Coverage for women, prior to pregnancy, may reduce fetal alcohol exposure; and
  • Troubled young adults would have greater access to mental health services. (more…)

House Subcommittee Approves FY 2014 Budget for Community Health

 Full report in PDF

On March 20, the House Appropriations Subcommittee for the Department of Community Health approved its version of the Fiscal Year 2014 budget. Overall, the Subcommittee did not support programs recommended by the governor to improve the health status of Michigan residents. Of critical importance, the Subcommittee did not support the governor’s recommendation to accept federal funds to expand eligibility for the Medicaid program.

The Subcommittee also did not support expanded funding for key initiatives recommended by the governor including the Healthy Kids Dental program, infant mortality reduction initiatives, mental health and substance abuse service improvements for veterans, mental health innovation grants for high risk children and youths, or Health and Wellness initiatives. Subcommittee initiatives included in the budget are increased funding for the Nurse Family Partnership and pregnancy and parenting support projects.

The House Subcommittee’s budget includes $15.3 billion in total funding for the Department of Community Health in Fiscal Year 2014, a 2% increase over current year funding, but 8% below the Governor’s recommended budget for Fiscal Year 2014.

Included in the House Subcommittee budget are the following:

MEDICAID

Medicaid expansion:

    • Governor: The governor’s budget includes 100% federal funds to support the expansion of Medicaid coverage to very low-income parents and childless adults up to 133% of the federal poverty level. This influx of federal revenue would increase total Medicaid funding to $12.3 billion, and result in savings in the state’s General Fund of $206 million by allowing the state to use federal funds to provide comprehensive services to a population that is currently eligible for very limited state funded health benefits. The governor recommended that half of the savings in state funding ($103 million) be deposited in a newly created healthcare savings fund, with the remainder used to expand the Healthy Kids Dental program and other state services.

The expansion would increase the number of Michigan residents covered by Medicaid from approximately 1.8 million to 2.2 million, reducing the number of uninsured adults by 46%.

    • House Subcommittee: The Subcommittee rejected the governor’s recommendation to accept Michigan’s share of federal funds to expand healthcare coverage to 320,000 low-income parents and individuals through the Medicaid program, likely forcing many to remain uninsured, reducing access to primary care, and increasing costs through emergency room care.

Healthy Kids Dental:

    • Governor: The governor included $11.6 million ($3.9 million in state General Funds) to expand the Healthy Kids Dental program to 70,500 children in three counties: Ingham, Ottawa and Washtenaw. With this expansion, 50% of eligible children statewide would be covered in Fiscal Year 2014, and the governor indicated his intention to expand the program to an additional 100,000 children in Fiscal Year 2015.
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

Graduate medical education:

    • Governor: The governor’s budget cut the one-time funding for the Graduate Medical Education program by $4.3 million. These funds are used by teaching hospitals to offset the costs of operating medical residency programs for physicians, and to provide care to uninsured and other vulnerable populations in hospitals and clinics.
    • House Subcommittee: The Subcommittee reduced funding for Graduate Medical Education by a $2.7 million, leaving $1.7 million in one-time funds.

MENTAL HEALTH SERVICES

Medicaid expansion:

    • Governor: The Medicaid expansion endorsed by the governor in his Fiscal Year 2014 budget would include comprehensive mental health services.
    • House Subcommittee: By rejecting the Medicaid expansion, the Subcommittee’s budget denies comprehensive mental health services to an estimated 320,000 Michigan residents, forcing them to go without needed services, be added to a waiting list for services, or receive services through the corrections system.

Mental health innovations:

    • Governor: The governor included $5 million in one-time General Fund dollars for mental health innovations, including: (1) comprehensive home-based mental health services for children to reduce child hospitalizations and strengthen families ($2.5 million); (2) a pilot program to address the needs of youths with complex behavior disorders ($1 million); and (3) mental health “first aid” training for a range of public and private groups, including law enforcement officers, to ensure that they can identify mental health problems ($1.5 million).
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

Mental health services for special populations:

    • Governor: The governor reduced funding for mental health services for special populations from $8.8 million to $5.8 million, a cut of 34%. Included in the cuts are the Hispanic/Latino Commission, ACCESS, Arab/Chaldean services, the Chaldean Chamber Foundation, and the Michigan Jewish Federation.
    • House Subcommittee: The Subcommittee concurred with the governor.

Jail diversion initiative:

    • Governor: The governor redirected $1.6 million in state funds currently used by psychiatric hospitals to a new jail diversion initiative that will enhance current diversion efforts for individuals with mental illness, emotional disturbances, or developmental disabilities within five Michigan communities.
    • House Subcommittee: The Subcommittee concurred with the governor’s recommendation, adding language that gives priority to county sheriffs and community courts, specifying the St. Joseph County Sheriff and the 36th District Court community court project.

Mental health and substance abuse services for veterans:

    • Governor: The governor recommended $60,000 to improve mental health and substance abuse services for veterans and their families, including training and credentialing for community mental health and substance abuse programs, co-location with services provided through the Veterans Health Administration, and training for law enforcement officers in recognizing post-traumatic stress disorders.
    • House Subcommittee: The House Subcommittee rejected the governor’s proposal.

Services for persons with chronic mental health conditions:

    • Governor: The governor included $900,000 for three “behavioral health home” demonstration projects for Medicaid recipients with chronic mental health conditions. The model coordinates physical and mental health care, including comprehensive case management, family education and service referrals. The demonstration projects would be located in the Washtenaw area (Washtenaw, Livingston, Lenawee and Monroe counties), Northern Michigan (21 counties), and either Saginaw County or the Genesee region.
    • House Subcommittee: The Subcommittee concurred with the governor’s recommendation.

HEALTH CARE SERVICES DELIVERY INNOVATION GRANTS

    • Governor: The governor recommended $3 million for competitive grants to address emerging healthcare and service delivery system issues and needs, encourage innovation in service delivery, and build partnerships between the public and private sectors.
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

PUBLIC HEALTH SERVICES

Local public health services:

    • Governor: The governor recommended no changes in funding for local public health essential services, which are funded at $37.4 million in the current fiscal year.
    • House Subcommittee: The Subcommittee included current funding of $37.4 million, but added a $100 placeholder to ensure a point of difference for later legislative debates, indicating an interest in a possible restoration of funding for local public health departments.

Health and Wellness Initiative:

    • Governor: The governor’s budget removed $5 million in one-time state funding available in the current year for Health and Wellness initiatives, and then increased ongoing funding by $1.5 million, bringing total funding to $8.7 million–a net reduction of $3.5 million or 29%. The largest cuts in the governor’s budget include the elimination of funding for cancer prevention and control ($862,500), an 87% cut ($750,000) in the pregnancy prevention program, and a 44% cut in both the 4×4 wellness program ($1 million) and cardiovascular health programs ($317,500). Also reduced are the diabetes and kidney programs, health disparities, the Michigan Care Improvement Immunization Registry, the Michigan Model for school health, and smoking prevention programs.
    • House Subcommittee: The Subcommittee concurred with the reduction of the one-time funding of $5 million, but rejected the additional $1.5 million in ongoing funding, resulting in total recommended funding of $7.2 million, or a reduction of 41% in the Health and Wellness Initiative. The Subcommittee eliminated funding for the 4×4 wellness program, and took additional cuts in cardiovascular health and smoking prevention programs.

Infant mortality reduction:

    • Governor: The governor included $2.5 million in state funds to implement recommendations in the Infant Mortality Reduction Plan, including regional perinatal care, initiatives to reduce medically unnecessary deliveries before 39 weeks, the promotion of safe sleep practices for infants, and expanded home visiting programs. Medicaid currently pays for 51% of all Michigan births, and Michigan ranked 36th in the country in infant deaths in 2012, with infant deaths rates that are three times higher for African American babies.
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

Home visitation programs:

    • Governor: The governor’s budget did not include new funding for home visitation or parent support programs. During last year’s budget cycle, the Legislature approved $2 million for a home visitation and support program that promotes childbirth and adoption, as well as an additional $1 million for the Nurse Family Partnership program. The governor vetoed both budget increases.
    • House Subcommittee: The Subcommittee included $350,000 in state funds for the Nurse Family Partnership program, a 4% increase, as well as $700,000 for a new pregnancy and parenting support pilot project. Budget language indicates that the Nurse Family Partnership funding is to be used to improve training and support for nursing teams, recruit families in high-need communities, and plan and market a program in Detroit. The goals of the pregnancy and parenting support pilot are to promote childbirth choice, educate parents about adoption options, improve parenting skills, and provide abstinence education. Counseling, support and referral services would be available to women during pregnancy through 12 months after birth.

Want to tackle poverty? Restore the EITC

Today is the seventh annual EITC Awareness Day.

The EITC – Earned Income Tax Credit — is a refundable tax credit available to low- and middle-income families who work and pay other taxes. The EITC helps offset regressive taxes that hit poor families the hardest – such as federal payroll, sales, property, and excise taxes  – and provides much needed relief to low-income families (those earning under 200% of the federal poverty line).

Michigan working families can currently claim two Earned Income Tax Credits: a federal EITC and a state EITC, which is designed to supplement the federal credit. In Michigan, according to the latest available data, one-third of all working families are considered low-income and one in every four children live in poverty (a higher childhood poverty rate than the national average). (more…)

Let’s resolve to make Michigan healthier

From the January newsletter
Sign up for League newsletters and emails

Happy New Year!

As you make your New Year’s resolutions – healthy eating and exercising are my all-time favorites – let’s resolve to make Michigan a healthier place too.

The start of the New Year means that budget setting is right around the corner. First with the governor’s executive budget, then with the Legislature’s public hearings and votes, the budget process is our chance to set our priorities as a state. (more…)

Next Page »