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Legislators, analysts press administration on foster care tiered-rate trigger and foster-family agency insurance crisis
Summary
The subcommittee reviewed the proposed trigger for implementing the permanent foster-care tiered-rate structure, additional fidelity and automation funding, and discussion of bridge funding requests from foster-family agencies facing rising insurance premiums.
The Assembly Budget Subcommittee No. 2 examined budget language and funding tied to California's transition to a permanent foster‑care tiered‑rate structure and broader child welfare items, and pressed the administration on a proposed Department of Finance trigger and on funding to address a foster‑family agency insurance shortfall.
Tiered-rate structure and trigger language
Department officials told the committee that the state is continuing implementation work on the permanent foster‑care tiered‑rate structure scheduled to take effect July 1, 2027. Angie Schwartz, deputy director for the Children and Family Services Division at CDSS, described the request for positions and implementation funding: the department requested positions and resources to support CANs fidelity, county implementation support and fiscal functions, and to "assist with cost avoidance of federal financial penalties and support continued improvement in the accuracy of county expenditure information."
The May Revision also includes trigger language that would leave a spring 2027 Department of Finance determination to decide whether the state has sufficient general fund to implement the new rates on schedule. LAO analyst Angela Short told the committee that the trigger would "effectively put an indefinite delay to implementation on the tiered rate structure creating uncertainty for youth, caregivers, and service providers," and warned that the trigger transfers an important policy choice away from the legislature.
Lawmakers and analysts discussed alternatives: the LAO suggested the legislature could require a slower phase-in or implement specific components sooner (for example, immediate‑need payments before strengths‑building components) to preserve legislative oversight while addressing cost concerns.
Foster‑family agency insurance and short‑term options
Committee members pressed CDSS on how the budget responds to rising insurance premiums for foster‑family agencies (FFAs), which advocates say have forced some agencies to close. The department said 10 agencies had closed to date because of insurance pressures, and that advocates had asked for bridge funding equal to roughly $42.2–47 million over two years (an updated survey reduced the ask to about $42.2 million). Department staff said FFAs had asked for short‑term premium relief and administrative COLA to bridge to the tiered‑rate structure, but the May Revision did not include a specific dedicated bridge appropriation.
Other child-welfare technical and program items
The May Revision included adjustments to the Foster Family Home and Small Family Home Insurance Fund (FISH Fund), trailer‑bill language for CWS CARES automation and a request for funds to support fidelity training for the Child and Adolescent Needs and Strengths (CANS) and Child and Family Team (CFT) tools. Jessica Rougeau with CDSS said the CWS CARES provisional language would provide funding flexibility for project completion.
Next steps
Lawmakers asked the administration for more specificity on the FFAs' bridge funding requests, clearer timelines for the tiered‑rate automation and the intended legislative role in any future decision about implementation. LAO and members urged rejecting blanket trigger language and retaining legislative authority over whether to authorize a major rate‑structure change in 2027.
