The Child Trends report regarding state child welfare financing: Federal, State and Local Spending to Address Child Abuse and Neglect in SFY 2012 continues to show that over the years states do have significant flexibility in federal spending. Over the more than a decade of surveys, the entitlement funding of Title IV-E foster care, kinship care and adoption assistance has equaled approximately half of the federal dollars spent on child welfare services. At the same time flexible funding sources including TANF, SSBG and to a lesser extend Medicaid (technically not a flexible source) make up over forty percent of the federal dollars spent and another 8 percent is made up of flexible child welfare dollars (mainly Title IV-B). Despite the flexibility it is less clear how states are making their choices and investments and how it correlates to what is taking place within states in regard to foster care placements.
Of the 34 states (discounting the waiver state of Florida) that experienced a decrease in overall child welfare spending since 2010, nine actually increased the number of children in foster care between 2010 and 2012 (the same two years when spending was compared). Of the top five states in terms of overall total child welfare spending reductions: Louisiana (-39%), Nevada (-36%), New Hampshire (-35%), Wyoming (-27%) and Connecticut (-25%), four experienced decreases in spending at a higher level than the decreases in foster care placements between 2010 and 2012 with the fifth state realizing a slight increase in foster care. Of the top five states in spending reduction the numbers in foster care changed by: Louisiana (-10%), Nevada (-2%), New Hampshire (-9%), Wyoming (-4%) and Connecticut increased (+3%).
The survey also indicated that when it came to flexible funding such as TANF, the biggest flexible fund at $2.8 billion, 27 states used it for foster care services, followed by child protection (23 states) and prevention (13 states) and in-home services (12 states). Similarly SSBG was used by 30 states for foster care services followed by child protection (26 states) and prevention (14 states). Despite the flexibility in the use of these federal funds, states are limiting their investments into prevention and in-home services.
