MDHHS outlines foster care progress and five FY26 budget proposals to bolster kinship placements

The Michigan Department of Health and Human Services (MDHHS) briefed the House Appropriations Subcommittee on Human Services on the state’s foster care system and five executive budget proposals intended to expand kinship care and other supports.

Amy Eppke, senior deputy director over financial operations for MDHHS, and Demetrius Starling, senior deputy director for the department’s Children’s Services Administration, told the committee that MDHHS receives about 175,000 Child Protective Services complaints annually through centralized intake and that current foster care caseloads are near 10,000 children.

The department said roughly half of those children are placed with relatives or other kinship caregivers, a proportion it cited as a major policy success compared with a peak of more than 17,000 children in foster care in fiscal 2019.

MDHHS described five initiatives included in the governor’s proposed fiscal year 2026 budget to build on that work:

- A proposed $24 million increase to support kinship care staffing and services statewide, listed in the executive budget as an FY2026 increase. Eppke described this as funding to “continue to match children with the family setting.”

- A pilot to create 30 professional foster parent positions, each paid an annual salary and intended for children with very complex behavioral or physical needs.

- Expanded services for adopted children and their families to provide behavioral and physical health supports.

- A proposal to replace use of Social Security payments that now flow to the department for some children in foster care with general fund dollars, allowing the child’s Social Security benefits to be deposited into the child’s own account for later use.

- A statewide expansion of family impact teams (FIT), which Eppke said currently operate in 23 counties, to all 83 counties; MDHHS described the expansion as cost neutral by moving existing staff from the Pathways to Potential program into the FIT structure.

Demetrius Starling highlighted statewide reforms that MDHHS says have supported kinship placements, including separate licensing standards for kinship caregivers — Michigan was described as the first state approved for such separate standards — expanded family-finding work, and partnerships with private providers and the Michigan State Police to reduce missing-youth cases. Starling said Michigan’s missing-youth rate is now “less than 1%,” below the 4% national average.

Committee members asked for clarifications on funding sources and eligibility. Representative Kelly and others sought detail on a $30 million figure reported elsewhere; Eppke replied that the executive budget line is a $24 million increase for FY2026 and said the department would double-check any reports of a separate $30 million federal award. Starling noted MDHHS received a Children’s Bureau grant in 2021 that helped establish statewide kinship work but did not confirm a separate $30 million federal allotment during the hearing.

Committee members also questioned proposed training and qualification requirements for professional foster parents; MDHHS said federal guidance and the needs of children with “high acuity” behavioral and medical needs informed the decision to require greater training and, in some cases, higher education or credentialing for those paid placements.

Eppke and Starling emphasized that while MDHHS is acting to reduce unnecessary entries into foster care, the department must maintain capacity for higher-acuity foster placements and placement stability.

The subcommittee did not take a formal vote on MDHHS’s budget proposals during the presentation.