Georgia DHS projects $44.5 million state shortfall for out‑of‑home care in FY2026 budget

The Georgia Department of Human Services told the House Appropriations Committee on the Department’s FY2026 budget that it projects an additional $44,470,858 in state funds will be needed next fiscal year to meet out‑of‑home care costs for children in foster care. Commissioner Brose, testifying for the agency, said the increase is driven by higher utilization of specialized services and placements and by rising reimbursement costs.

The request comes as about 10,000 children are in foster care in Georgia on any given day, the commissioner said, and “utilization of specialized services and placements has increased by 23% since FY2022,” while “reimbursement costs outside of daily per diem payments have increased by 15%.” Those trends, Brose told the committee, are the primary drivers behind the projected FY2026 shortfall.

Why it matters: Higher out‑of‑home care spending affects state budgets and service capacity for children who cannot safely remain at home. If the projected gap is not covered in the FY2026 budget, the department said it will face pressure to absorb costs, reduce placements, or seek supplemental appropriations as it has in prior years.

Budget adjustments and program changes discussed The commissioner summarized the governor’s recommended statewide adjustments—reductions tied to insurance premium changes and a slightly higher federal medical assistance percentage (FMAP)—and program‑level changes the department proposes for FY2026. Highlights the committee heard include:

- Child support services: an increase just shy of $61,000 to add matching capability by joining the child‑support lien network. Brose said without that state funding Georgia would forgo “nearly $2,700,000 in potential child support collections on an annual basis.”

- Out‑of‑home care: a projected need of $44,470,858 in state funds for FY2026 to meet projected expenditures as placements and wraparound services increase.

- Wraparound services pilot: a recommended reduction of $1,500,000 after the U.S. Administration for Children and Families determined last year that the pilot’s costs were an ineligible use of federal Title IV‑E matching funds. Brose said that federal interpretation led to the change.

- Georgia CASA and other contracts: a state funding increase of $1,700,000 in FY25 to cover a loss of federal funding for the Georgia CASA contract was mentioned as an FY2025 amended budget item; the commissioner told the committee the agency did not initially request that House‑added amount but welcomed it.

- Licensing and program implementation: the department requested funding to implement two new license types created by state law—qualified residential treatment programs and commercial exploitation recovery centers—so the agency can draw down federal funds for congregate‑care settings. Brose noted the state already operates a 10‑bed qualified residential treatment pilot at Murphy Harps and Grace’s Place, a 24‑bed recovery center in Gwinnett County for child survivors of human trafficking.

- Transfers and small adjustments: Brose cited a $225,000 transfer to the Department of Public Health for brain health awareness and smaller reductions such as a $93,233 decrease tied to lower collections of marriage and divorce filing fees that are statutorily earmarked.

Committee questions and staff follow‑up Representative Oliver pressed the commissioner about a $1.7 million House addition for a “special victims unit,” asking whether that item was a permanent continuation and whether the agency had requested it. Brose said the $1.7 million appeared in the FY2025 House amended budget after the department’s original request and that the agency appreciates the additional funding for the unit’s work locating missing foster children. Brose said, “I stand by this confidently. And, the statistics speak for themselves.”

Law and authority issues also arose. Representative Oliver asked whether the department had reviewed its legal authority for activities tied to missing‑child recovery, comparing department duties to local law enforcement authority. Brose said she is an attorney and stated the department is confident of its legal authority, while acknowledging that others may disagree with that legal view.

Committee members also asked for additional data on entry and exit trends for children in care. Brose said the House Budget Office has requested such data and that the agency is pulling weekly reports; “to me, it seems like they’re almost dead even,” she said, but promised to provide more rigorous figures.

Context and next steps Brose emphasized that growth in out‑of‑home care has historically been addressed through both supplemental and base budgets and that the department is projecting the additional FY2026 need to meet current expenditure trends. She closed by thanking the committee and offering to take questions.

The committee did not take a formal vote during the department’s presentation but asked staff to supply additional data on care exits and trends. Lawmakers and staff will consider the FY2026 request as the Appropriations Committee develops its recommendations.

(Reporting note: direct quotes and budget figures are drawn from Department of Human Services testimony to the House Appropriations Committee.)