FRANKFORT — Residential treatment centers for foster children are looking at cuts to services, staffs and in some cases closing because of a drop in the state's reimbursement rates that went into effect Monday, according to some private providers.
Gateway Children's Services in Mount Sterling, which serves Montgomery and surrounding counties, might have to close in 90 days because it lost a $300,000 contract with the state's juvenile justice department to house juvenile offenders. The state has also cut the amount it pays the facility to house other foster children.
More than 30 people could lose their jobs, and the state would have to scramble to find placements for 24 children currently at Gateway, officials said.
"We're the only shelter in the area," said Kaye Jones Templin, chief executive officer of Gateway Children's Services. Children are already being placed on waiting lists for services. "But can these children be put on a waiting list when they are on the street?"
"Our nation has more shelters for animals than women and children combined," said Jones Templin.
Jones Templin spoke Monday at a news conference outlining the cuts to children's services. The news conference came just one day before the General Assembly reconvenes for the 2009 session. Its first priority will be tackling a $456 million projected budget shortfall.
Gov. Steve Beshear has proposed 4 percent cuts to most state agencies, moving money from the state's rainy day fund and a 70-cent increase in the cigarette tax.
As part of those cuts, private child care agencies — which provide residential treatment for some of the most difficult-to-place children in the foster care system — were cut a total of $4.5 million, or about 7 percent over the next four months. That includes $1.4 million in state General Fund dollars and $3.1 million in federal dollars.
Private child care facilities house and treat approximately 3,500 of the 7,000 children in state custody.
After more than seven years of stagnant funding, private child care providers were able to get a slight increase in reimbursement rates in 2008. But this round of cuts does away with most of that increase, the providers said, dropping the total budget for the private agencies to $133 million.
The cuts to reimbursement rates are on top of cuts the agencies received in other programs at the beginning of the fiscal year, which started July 1.
For example, the Home of the Innocents in Louisville runs a prevention program that helps teach parenting skills and keeps children out of the foster care system. Last year, that program served 160 children and had a 100 percent success rate — no at-risk children entered the system. Funding for that program was cut July 1.
The program is still running, but Home of the Innocents is not sure how long it can continue to fund the program.
Providers are looking for help from already-tapped private donors to make up for the drop in state and federal funding. But many private donors are hesitant to give money for programming, said Ralph Risimini, president of the board of St. Joseph Children's Home in Louisville.
"People don't want to give to help the state balance its budget," Risimini said. "They think 'I pay taxes for that.'"
Still, Risimini noted that the state was only paying 75 cents on the dollar for the cost of treating these children even before the cuts. Agencies had to come up with remaining money to provide the services.
"If it were a parent that did that, we would likely have them in court," Risimini said.
Bart Baldwin, president of the Children's Alliance, the non-profit umbrella organization for the state's private child care providers, said the organization will be lobbying state leaders to restore funding this legislative session.
"Children in foster care should be the absolute last to have services reduced," said Baldwin. "They depend on all of us to protect them and to provide safe, healthy environments for them while the problems of their families are sorted out."
Gordon S. Brown, president and CEO of Home of the Innocents in Louisville, said 850 corporate and civic leaders have agreed to speak to their respective legislators on behalf of the agencies and the state's children.
Brown said all agencies have cut every bit of fat they can find from their budgets. Meanwhile, electricity and health care costs are climbing.
"I believe this particular round of cuts is going to put some of our agencies at the brink of closure," Brown said. "And unfortunately, many of those are in rural areas where we can least afford to withdraw those services. "