Each year DHS submits a plan and budget for the care of abused, neglected, and at-risk children and for children who are part of the juvenile justice system to the state Department of Public Welfare, Office of Children, Youth, and Families (OCYF), called the Needs-Based Plan and Budget (NBPB). This is an estimated budget, as the state is mandated to pay for reasonable and relevant costs that counties incur for the care of these children. At the end of each year’s NBPB, the state and City reconcile the difference between the NBPB amount that is certified and the actual expenditures. The difference is called “overmatched” dollars and represents City general funds that are used to pay for services not certified by the state. The state responds to the proposed NBPB plan in the winter of the year preceding the plan’s adoption. The City and state negotiate in the spring, with a final, certified plan funded for the upcoming fiscal year.

The most recent plan and budget were submitted in August 2008. The state has responded to this proposed NBPB with a tentative allocation for the City for FY10 that is $40 million less than the State’s revised certified FY09 allocation and $69.2 million less than the City’s projected expenditures for FY09 (and less than the amount actually spent in FY08). In its response to the City’s proposed FY10 NBPB, OCYF removed key programs from the NBPB process and allocation and placed them into separate special grants programs. These funds, taken from the child welfare line in the State budget, lower the amount available for the NBPB, and leave these grants to the discretion of the Deputy Secretary of Public Welfare. This action reduces the base funding level in Philadelphia’s budget and eliminates the due process built into the NBPB law and regulations.

The dollars that the state and City use to support needed services for children who are part of the DHS child welfare system, for programs such as Out of School Time/After School programs, come from a number of sources. One of the largest is Act 148, the State’s primary source of funding for the needs-based budget. The State’s FY10 tentative state Act 148 allocation is $381.1 million, which is $20.4 million less than the FY10 projected need in Act 148 funding. Because the City pays approximately 20% of the cost of child welfare, the City would have to cut approximately $25.5 million in services to children and families to make up for the shortfall.

The Department of Behavioral Health and Mental Retardation Services receives 99% of its funding through the Commonwealth. The Department provides services ranging from hospitalization or residential placement for treatment of behavioral health issues to case management and other community supports, with a focus on prevention, wellness and self determination.

Due to the large proportion of State dollars supporting these services, any decrease in the Commonwealth’s budget has a direct impact on services in Philadelphia. For FY10, the Department anticipates a decrease in State dollars, based on the Governor’s proposed budget. The decrease may affect community services to people with mental illness and substance abuse issues.

Of more concern, is a proposal by the Department of Public Welfare to reduce the amount of risk and contingency reserves allowed to be held by counties for Medical Assistance behavioral health services. If the State reduces the amount of the counties’ reserves, this may affect the City’s ability to fund programs for people without health insurance.

These dollars support a variety of programs developed in support of the Mayor’s Homeless Strategy including 55 safe haven beds as well as case management services to individuals living on the streets and in the shelter system. These supports provide a first step for individuals ready to stop living on the street and ongoing social services that allow individuals to sustain permanent housing.

The Department’s transformation initiatives are also supported with reinvestment funds. These include programs established in the community as alternatives to traditional treatment. Programs like this allow individuals to drop-in and connect with other community resources and engage with peers in their fight against addiction. These dollars also fund a program to support the treatment system through intensive training and clinical support for staff in the delivery of cognitive therapy (an evidenced-based practice).

The second key area of investment is the $12 million in support of the Behavioral Health Special Initiative (BHSI) program. Without the ability to continue to utilize reserves in excess of 45 days (the current standard), the City would lose the ability to provide services to about half of the approximately 10,000 individuals (many of them people waiting to be approved for medical assistance or not in the HealthChoices plan) currently supported through BHSI programming.