County social service agencies could lose millions in reimbursements -- or be forced to change their priorities for placing foster children -- under a federal budget bill that might win approval today.

One small piece of the Budget Reconciliation Act, which the House of Representatives is expected to vote on today, would eliminate the reimbursements that counties receive for the administrative costs of placing foster children with family members.

Under the new legislation, counties would be reimbursed only if they place children with licensed foster families or homes -- even though state and federal guidelines direct counties to try to place children with family members for purposes of familiarity and comfort. Generally, family members of children in county custody aren't licensed foster parents and have little incentive to become so.

"This is the sort of thing that, at the local level, just drives us crazy," said Chuck Harris, assistant director for child welfare and adult services in Durham County's social services department. "Getting new federal rules that contradict what we feel is best practice: placing kids with their families."

In Durham, officials say they could lose as much as $300,000 in reimbursements this year if the federal measure is approved. Statewide, the lost funding could be in the millions, some social services officials say. Fiscal analysts in some local counties and with the state Department of Health and Human Services have yet to determine the total financial impact.

What is clear is that counties would have to make up the lost funding themselves or change their child placement priorities. At some point, counties might find themselves at an untenable crossroads, weighing the need for federal funding against their desire to place a child with a family member, even one who isn't officially licensed, said John Shore, president of the N.C. Association of County Directors of Social Services.

"You want to do the right thing, but can you afford to?" said Shore, Guilford County's social services director. "Because it's local funding, it will depend on local county commissioners and their capacity to pay for it."

The proposed bill is a controversial measure that critics say would, among other things, hurt the poor and elderly through cuts to Medicaid and Medicare. But proponents say the cuts are necessary to get spending on federal benefit programs under control. Already approved narrowly by the Senate, the legislation won House approval in December by six votes. It faces another House vote now because of some technical changes.

Across North Carolina, about 2,000 children in county custody are placed with family members each year. The impact of the legislation likely would vary from county to county depending on each municipality's financial health.

In Durham, 62 of 258 children in the county's custody have been placed with family members, and social service officials say the $300,000 in estimated losses this year would be tough to make up.

In Wake and Orange

Though the financial picture in Wake County isn't clear yet, the damage isn't expected to be severe. Less than one quarter of the 587 children in that county's custody are placed with unlicensed family members, a small enough slice of the whole that the county can deal with the extra expense, said Elaine Rakouskas, manager for foster care at Wake County's Department of Human Services.

"I don't see it as being a big blow or earth-shattering for us," Rakouskas said. She added that she expects her agency to continue trying first to place children with family members.

Next page >

Get $150+ in coupons in every Sunday N&O. Click here for convenient home delivery.