DCYF budget proposes SSIS modernization, CCAP compliance changes; committee lays over HF2436

The Minnesota House Children and Families Finance and Policy Committee heard a presentation from Department of Children, Youth and Families Chief Financial Officer Ashley Reisenauer about the governor's budget recommendation for the new DCYF on proposals that include program integrity investments, IT modernization, and changes to the Child Care Assistance Program (CCAP). Committee Chair West moved House File 2,436 to be laid over for possible inclusion in a later omnibus bill.

The governor's proposal dedicates existing state and federal funding and adds general fund resources to support program-integrity enhancements, modernization of the Statewide Automated Child Welfare Information System (SSIS), and steps toward federal compliance for CCAP. Reisenauer said the net General Fund impact is a savings of $16,500,000 in fiscal years 2025'27 and a $7,700,000 savings in the 2028'29 biennium while preserving core safety-net programs.

Key budget items described by the department include $5,400,000 in 2026'27 and $2,800,000 in 2028'29 to enhance program integrity, which the department said would fund a statewide electronic attendance record system for CCAP and two FTEs in DCYF's compliance office. The governor's recommendation also dedicates $10,000,000 from existing DCYF IT funding for SSIS modernization and proposes one-time $200,000 to add prelicensure inspection reports to the Licensing Information Lookup (LIL) tool to meet CCDF requirements.

Reisenauer said CCAP changes in the proposal would cap family co-payments at 7 percent of family income (down from 14 percent), restructure tiers to simplify administration, and make redeterminations consistent for 12 months from the last determination. The proposal would also require legally non-licensed providers to complete annual health and safety training.

On operating costs, Reisenauer described expected cost pressures including a roughly $1,000,000 increase in printing and mailing costs and an estimated $2,400,000 increase in hardware/software costs for eligibility and payment systems (about half of which the department expects will be offset by federal reimbursement). The department said it assumes an average federal reimbursement of about 35 percent across administrative costs and that the operating adjustment does not fully cover projected increases.

Reisenauer and assistant commissioner Diane Halsey answered members' questions about the proposed provider hub and the planned electronic attendance module; department staff said the attendance system would be built into the provider hub and would accept uploads from providers that already have electronic records. Members also pressed the department about the Great Start Compensation Support Payment Program; staff said the proposal expands eligibility for the existing 10 percent payment increase but is budget neutral and does not expand the total pot of funds.

The department described several savings proposals included in the governor's package: cancellation of an appropriation tied to the Mille Lacs Band of Ojibwe's decision not to join the American Indian Child Welfare Initiative at this time, and a reduction of $1,500,000 per year in restorative-practices grants, leaving a base of $1,000,000 per year.

After questioning and public-testimony procedures were closed, Chair West moved to lay House File 2,436 over for possible inclusion in an omnibus bill. The motion was seconded by the committee leadership and the motion prevailed by voice vote.

Outlook: Committee members suggested staff will continue to press the department for more detailed line-item information on major cost drivers and to work on implementation details of IT proposals as the budget and omnibus process proceed.