A new Child Trends survey of state child welfare spending shows a slight decrease in funding between 2012 to 2014 with a slightly bigger decrease in federal spending. The survey showed a continued pattern of great variations across the fifty states. A pattern that has existed since the first such surveys provided detail on spending starting in 1996. Combined state-local-federal spending totaled $29.1 billion compared to $29.3 billion in 2012.
The federal spending totaled $12.8 billion in combine Title IV-E ($6.8 billion), TANF ($2.8 billion), SSBG ($1.3 billion), Medicaid (spent through the child welfare agency–$ 886 million), Title IV-B ($557 million) and a few smaller sources. All categories except Title IV-E foster care-adoption assistance decreased. Total state and local spending was $16.2 billion.
Much of the increase in Title IV-E funding came from adoption assistance. Adoption assistance, as a result of the 2008 Fostering Connections to Success Act, has experienced a gradual ten-year de-link of adoption assistance from the 1996 AFDC eligibility standard with all children two and older covered as of October 1, 2016. Fostering Connections also expanded IV-E funding by allowed states the option of extending IV-E foster care to 21 and allowing states to expand funding to subsidized guardian-kinship families. Only 33 states have taken that kinship care option as of FY 2016.
West Virginia is at the top as far as states relying on federal funding. Eighty-four percent of West Virginia’s total child welfare spending came from federal sources. Of the total of $130 million West Virginia spent in federal funds, $70 million came from Title IV-E. That represented a dramatic 75 percent increase in IV-E spending over 2012. By contrast the state of Wyoming decreased its draw of federal Title IV-E funds by 59 percent. Wyoming drew 52 percent of its total spending from federal dollars. At the other end of the spectrum, Pennsylvania and Delaware both drew only 21 percent of their child welfare funds from the federal government. Pennsylvania drew 67 percent of its federal funds from Title IV-E while Delaware drew 71 percent from Title IV-E.
Also of note, Michigan drew 44 percent of its total federal funding from the TANF block grant while Texas, which has historically used more TANF funds for child welfare than any other state, drew 38% of its federal child welfare funds from the TANF block grant.
Also of note in the survey is the first review of Title IV-E waiver funds. The survey tracks waiver spending in 18 of the 30 waivers issued. Total federal spending was $1.1 billion in waivers but the survey determined that 58 percent of the waiver funds were spent on services eligible for reimbursement under current Title IV-E law without the waiver. An additional 32 percent of the federal spending through waivers was spent on services and supports that could have been covered under Title IV-E but for the fact that the child was not eligible for IV-E coverage due to the AFDC link or other eligibility hurdles. Only ten percent of funding was for services not traditionally available under IV-E such as in-home and parent supports.
Waiver authority by HHS is due to expire in FY 2019. That expiration has been an impetus for passage of the Families First Act since it is believed that some of the waiver services might be covered by the expanded IV-E services part of that legislation. Key legislative staff have been insistent that waivers will not be extended once the law expires.
An additional complicating factor for continued waiver authority may be the fact that most states are now seeing increases in their foster care numbers. In at least some instances the foster care increases will not necessarily result in increased federal spending for states that have waivers which have a “fixed-allocations” or a block of funding for the life of the waiver.