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F I S C A L I M P A C T R E P O R T

SPONSOR Ryan

ORIGINAL DATE

LAST UPDATED

1-31-06

HB

SHORT TITLE

PAYMENTS TO FAMILIES WITH FOSTER

CHILDREN

SB

398

ANALYST Lucero

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

$500.0

Recurring

General fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Appropriation in the General Appropriation Act, HAFC substitute for HB2 con-

tains a $500.0 recurring general fund increase for the foster care rate subsidy.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Children, Youth and Families Department (CYFD)

Administrative Office of the Courts (AOC)

SUMMARY

Synopsis of Bill

Senate Bill 398 appropriates $500.0 from the general fund to Children, Youth and Families De-

partment for the purpose of increasing payments by up to seventy-five dollars ($75.00) per

month for families with foster children.

FISCAL IMPLICATIONS

The appropriation of $500.0 contained in this bill is a recurring expense to the general fund. Any

unexpended or unencumbered balance remaining at the end of fiscal year 2007 shall revert to the

general fund.

HAFC substitute for HB2 contains $500.0 recurring general fund increase to be matched with

federal funds.

Senate Bill 398 – Page 2

The LFC recommendation contained $750 from the general fund to be matched with federal

funds.

CYFD requested an expansion of $504.0 from the general fund to be matched with federal funds.

The Executive has recommended a $200.0 appropriation accompanied by a $578.0 federal match

SIGNIFICANT ISSUES

The federal match rate for the foster care program is approximately 25/75%, similar to the Medi-

caid federal match rate. It makes economical sense to fund foster rate increases due to the rich

federal funds match.

The rate foster parents are reimbursed varies according to a schedule which pays more for the

care of children with acute, special, or disabilities.

CYFD provided the following statement:

The exact amount of the increase that foster parents could be given with the appropriation cannot

be determined at this time. It would depend upon the level of federal revenue that could be gen-

erated to match this appropriation and the number of children in custody at the time the increase

was implemented.

The foster payment rate has not increased since 1993. The bill may encourage individuals or

families to become foster parent(s) potentially reducing the shortage of foster parents.

Administrative Office of the Courts provided the following statement:

Foster families frequently express that they have hardship for being underserved by assistance

and services in their care of foster children in state custody. Insufficient resources may contrib-

ute to unsuccessful or difficult foster placements and limit recruitment and retention of foster

families, for which the state continuously suffers shortfall. Lack of foster families limits the

state’s options and success in providing foster placement. Limited permanency and long-term

foster placement is one of the biggest challenges of the foster care system. Although foster fami-

lies receive state assistance, they often report deficient resources and the necessity of paying for

services out-of-pocket. CIP supports CYFD efforts to provide additional foster families, such as

their recent Casey Family to Family initiative, and recognizes that additional financial assistance

will contribute to their success, along with that of the families who care for the state’s foster

children. Successful placement, as defined by child safety, permanency and well-being, is the

mission of the judiciary, as well.

ADMINISTRATIVE IMPLICATIONS

There is no administrative allocation in this appropriation. CYFD would have to absorb the

added cost.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to Appropriation in the General Appropriation Act, HAFC substitute for HB2 contains a

$500.0 recurring general fund increase for the foster care rate subsidy.

Senate Bill 398 – Page 2

TECHNICAL ISSUES

Foster families in New Mexico have not had a rate increase since 1993. Almost all employers

provide a cost of living adjustment. The foster care rate subsidy should be included with State of

New Mexico employees’ pay increases. Foster families are quasi-employees of the state.

OTHER SUBSTANTIVE ISSUES

Although the bill has no direct impact to the Judiciary, in the AOC’s court improvement project

(CIP) task force, the judiciary works with CYFD and other stakeholders and interested parties in

trying to improve child welfare and the judicial process for children and families in the foster

care system and involved in foster care, abuse, neglect, dependency and adoption cases. While

foster children are in the custody of CYFD’s protective services, the department’s actions, care

and efforts to achieve permanent placement are under the supervision of district court judges. In

pursuit of measurable improvement in the welfare of foster children, the courts are partners with

CYFD; this has recently been emphasized by the children’s bureau of the federal administration

for children and families who administer the child and family service review (CFSR) assessment

of the foster care system and provide funding for both CYFD’s protective services and AOC’s

CIP. The judiciary, as well as the department, must follow federal and state requirements to pro-

vide safety, permanency and well-being for foster children.

ALTERNATIVES

Create a new non-reverting fund that is endowed with $500.0 from the general fund. Inter-

est/income earned on the fund could be used to fund annual increases in the rate subsidy.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

Status Quo

DL/mt