Department of Human Services

The Department of Human Services helps families and individuals meet financial, medical, and social service needs. Department of Human Services programs provide financial assistance and medical assistance to Michigan’s low-income population; move people toward self-sufficiency through employment and training services; work to prevent abuse, neglect, and exploitation of children and vulnerable adults through direct services; and regulate and license adult and child care agencies, facilities and homes. Services are provided through a network of county-based offices. The governor’s proposed budget for fiscal year 2016 recommends total funding of $5.7 billion, of which $978.9 million is general fund. For fiscal year 2017, the recommendation is $5.7 billion, of which $977.4 million is general fund.

Highlights of Governor Snyder’s Budget Recommendation

• Pathways to Potential continues as a successful and innovative service-delivery model helping clients and their families address needs and barriers to success, including housing, food, education and employment. Working directly with clients in local public schools, outcomes achieved include improved school attendance, increased employment, and improved family functioning and independence. Chronic school absenteeism has decreased by more than 30 percent in Pathways sites. Additional outcome data currently being collected will assess 3rd and 4th grade reading and math levels, and the family’s economic well-being. In addition to public schools, eligibility workers are located in hospitals, long-term care facilities, community mental health agencies and private employers.

• To support an additional component of the department’s community outreach, 200 staff will be funded with private contributions and a federal appropriation of $20.6 million. At no cost to the state, programs will be expanded that provide adult placement and independent living services. In addition, staff will be located in health clinics, hospitals and with private employers to determine eligibility and assist in obtaining department services.

Children’s Services

• Continued support for the success achieved by Michigan’s child welfare system is a key component of the governor’s budget. Over the last 8 years, Michigan has invested $422.6 million ($245.3 million general fund) to enhance child welfare services for abused and neglected children. These long-term and lasting improvements to the child welfare system help keep children safe in their own homes and, when needed, support alternative living arrangements including foster care and adoption.

• When children are removed from their homes due to abuse or neglect, foster care payments support out-of-home care. The governor’s budget invests $182.7 million ($75.8 million general fund) to provide out-of-home care for children. These payments fund basic care and supervision until children are returned to their parents or are adopted. Due to the caseload has declined and stabilized in recent years. There are currently just under 13,000 children in Michigan’s foster care system.

• The current foster care payment system, established under the Social Welfare Act, splits costs between the state and counties for children in out-of-home care. This complex and inefficient cost-sharing model impedes timely reimbursements and encourages placements that may not be in the best interest of the child. The department proposes revisions to the foster care payment system that will focus on actuarially sound case rates and performance-based outcomes. These structural changes will encourage accountability, support positive outcomes for children, and generate accurate reimbursements for services provided through our private-sector partners.

• Several recent foster care rate increases have been implemented that deviate from the 50/50 state and county cost-sharing model. For each of these rate increases, the state is the rate increases and returns to an equal state and county cost-sharing arrangement until a new foster care payment system can be implemented. Private agency administrative rates are reduced from $40 to $37 per day, and the 2015 private agency residential rate increase is rescinded. In addition, new and current cases in out-of-home care are returned to a 50/50 state and county cost-sharing model. Savings from these policy changes are $10.4 million ($8.7 million general fund).

• The Adoption Subsidy program supports abused or neglected children when they are placed in permanent homes. Adoption subsidies are funded at $239.9 million ($87.5 million general fund) for 26,600 adopted children. Savings of $6.9 million ($6.5 million general fund) in the Adoption Subsidy program are achieved by restricting eligibility for a supplemental payment based on medical need.

Income Assistance Programs

• The Food Assistance caseload has declined since fiscal year 2011 and currently provides food to 1.6 million people including families with children, the elderly and those with disabilities. This vital safety-net program is supported in the governor’s budget with $2.6 billion in federal funds. Many families and individuals receiving food assistance are employed in low-wage jobs and depend on this program to help meet their basic needs.

• The Family Independence Program provides financial support for 31,400 families at a cost of $138.1 million ($44.7 million general fund). Policy changes to the Family Independence Program, including increased use of electronic correspondence and notification of eligibility, save $2.7 million ($1.8 million general fund) in the governor’s budget.

• Heating assistance programs are funded with $225 million in federal and state restricted funds. Included in the Department of Human Services budget is $175 million in federal funds for the home heating credit, energy-related crisis payments, and weatherization for low-income home owners. The Michigan Energy Assistance Program, administered by the Public Service Commission, is funded with $50 million and provides heating assistance to low-income families and seniors.

Child Support

• The Child Support Program is funded with $167.8 million ($23.6 million general fund) in the governor’s budget. This program helps Michigan children obtain financial support from absent parents. In fiscal year 2014, $1.35 billion in child support was collected and distributed for children and their families. Child Support Program savings of $1.8 million ($1.2 million general fund) are achieved in fiscal year 2016 by requiring Family Independence Program applicants to cooperate with program requirements prior to receiving assistance and by implementing electronic child support billings.

Adult Services

• To meet the needs of Michigan’s aging population, the governor’s budget invests $184.2 million gross ($21.6 million general fund) in Adult Services programs to assist the elderly and the disabled live in the least restrictive setting, free from abuse and exploitation.

Enhancing Service Delivery to Achieve Better Outcomes: The River of Opportunity

• On February 6, 2015, the governor signed an executive order combining the departments of Human Services and Community Health into the Department of Health and Human Services. An executive budget revision will be issued after the executive order becomes effective April 10, 2015 that aligns the new department’s budget. This new department is a key component in implementing and supporting the governor’s service delivery model — the River of Opportunity. The River of Opportunity restructures government in a way that puts people first by providing coordinated services that are targeted to individual needs and easy access.

Other Issues

In addition to the budget reductions identified above, the fiscal year 2016 Executive Budget also recommends the following budgetary savings:

• Administrative efficiencies from targeted office closures and consolidations, and elimination of vacant positions, save $8 million ($3.8 million general fund).

• Juvenile Justice services reductions result in savings of $2 million general fund.

• Information Technology reductions produce savings of $5.1 million ($2.8 million general fund).