LITTLE ROCK — Some foster parents will receive half as much money to take care of children in the fiscal year that starts July 1 because of $35 million in tax cuts approved during this year’s legislative session, a spokesman for the governor said Wednesday.
Frustrated foster parents were angry about the cut when they spoke Wednesday at a joint meeting of the Senate Committee on Children and Youth and the House Committee on Aging, Children and Youth, Legislative and Military Affairs.
The payments are being halved to help the Children and Family Services Division in the Department of Human Services stay within its budget.
Lawmakers and Gov. Mike Beebe approved the state’s $4.595 billion general revenue budget in March. It cannot be changed without the Legislature returning to session.
The governor’s original budget proposal was affected by five tax cuts approved by huge margins and totaling about $35 million. At the time Beebe said the cuts would cause “relatively little pain” to the budget.
Governor’s office spokesman Grant Tennille told the Arkansas Democrat-Gazette that the Legislature changed a “very tight” budget created by Beebe by adding the tax cuts and all agencies had to take a cut.
“When the cuts were made during the session, when the tax cuts reduced the revenue, it took an additional $1.59 million out of [the division’s] budget, and it’s necessitating some deeper cuts than we had wanted over there,” Tennille said. “When the Legislature makes the choices it made, for everyone now to say ‘Wait a minute, how did this happen?’, it’s fairly clear how it happened. We’ve got to live within the budget as it’s approved by the Legislature.”
The governor could use money from a rainy-day fund to close the gap for foster parents. Tennille was not sure how much money is in the fund. He said the division has not asked for help.
The cut affects therapeutic foster homes, which house about 285 children who have emotional or behavioral problems.
The cut will equal about $275,000 of the $1.59 million in cuts the division has to make, division Director Cecile Blucker told the committee.
Other cost savings will come from changes within the division, such as referring more cases to nonprofit and community groups, Blucker said.
All foster parents receive between $410 and $500 a month for room and board based on the age of their foster children, Blucker said. Starting July 1, when the fiscal year begins, therapeutic foster parents will receive $205 to $250 a month.
Room and board for therapeutic foster parents was targeted to be cut because those families receive an additional $74 daily per child to foster difficult children, Blucker said. She said a portion of that money goes to administrative costs.
Blucker said about 4,189 children currently are in the division’s custody.
She said she is not sure whether therapeutic foster parents will continue helping children after the change.
A handful of therapeutic foster parents spoke against the change Wednesday before the committees, saying that the current room-and-board rate is not sufficient and cutting it would be devastating.
“Kids cost money; $205 is not enough,” Mary Woodville, 53, of Benton said.
Woodville said she has been a therapeutic foster parent for 27 years. She said she already spends a lot of money out of pocket to clothe, feed and take care of her foster children.
Consvella James, 62, of Little Rock told the committees she understands that the division has to make cuts but that it is not fair to cut one aspect of foster care.
“A 50 percent cut ... is saying that those foster children that go into those foster homes do not deserve the same financial support that other foster children deserve,” James said.
James is executive director of Treatment Homes Inc. and said she has been a foster parent for 40 years.
Rep. Bubba Powers, DHope, said he was frustrated that lawmakers learned months after completing the budget that the tax cuts would affect foster children.
“We can’t vote to reinstate more money, it’s going to have to be found, to be created somewhere,” Powers said.
The tax cuts approved by lawmakers are:
Act 755 (Senate Bill 276 by Sen. Larry Teague, D-Nashville), to reduce the grocery tax from 2 percent to 1.5 percent, a $20.8 million-a-year cut in fiscal 2012.
Act 753 (Senate Bill 274 by Sen. Gilbert Baker, R-Conway), to expand from $2,500 to $4,000 the amount of a used car’s price exempted from sales tax, effective Jan. 1, 2012. It’s projected to cut revenue by $2.5 million in fiscal 2012.
Act 754 (Senate Bill 275 by Sen. Bill Sample, R-Hot Springs), to lower the state sales tax on utilities paid by manufacturers from 3.125 percent to 2.625 percent, effective July 1. A revenue loss of $5.27 million in fiscal 2012 is projected.
Act 736 (House Bill 1056 by Rep. Uvalde Lindsey, D-Fayetteville), to exempt from the state income tax low-income taxpayers who are heads of households and have two or more dependents, taking effect for tax-year 2011. It’s projected to reduce revenue by $3.7 million in fiscal 2012.
Act 738 (House Bill 1421 by Rep. Mike Patterson, D-Piggott), to extend the expiration date of the Delta Geotourism Incentive Act of 2007 from tax-year 2016 to tax-year 2021 and increase the maximum amount of investment for a credit from $100,000 to $250,000 in any tax year, taking effect for income-tax years starting Jan. 1, 2011. It’s projected to cut revenue by $75,000 in fiscal 2012.
Act 757 (House Bill 1369 by Rep. Matthew Shepherd, REl Dorado), to create a “sales tax holiday” the first Saturday and Sunday of each August for clothing, clothing accessories or equipment, school art supplies and school instructional material. It’s projected to cut revenue by $2.12 million in fiscal 2012.
Arkansas, Pages 9 on 06/23/2011