Neglected for years, child services funding formulas are badly outdated, lawmakers told

Funding for child welfare services in Nevada has stagnated and rising inflation is making it more difficult for county agencies to provide support, state lawmakers were told Tuesday. 

Clark and Washoe counties rely on an annual state block grant as a main source of funding for the services. The amount of that funding has been capped since 2012.

If the state adjusted the block grant funding for inflation it would take Clark County’s block funding base from roughly $42 million – the rate it’s been for more than a decade – to $63.1 million, Joanna Jacob, the government affairs manager with Clark County, told state lawmakers.

“We know we can’t walk into the Legislature and say we need a 48% increase,” Jacob said. “I’m just illustrating a lot of what I think you are feeling, what our families are feeling, and what everybody is feeling. Inflation is increasing, and everybody is struggling with this. Along with that comes some increased pressures on us in delivering programs.”

Local and state officials along with nonprofits briefed the interim committee on Health and Human Services Tuesday on issues within the child welfare system, and outlined policy recommendations to consider in the 2027 Legislative Session. 

Among the various recommendations was revamping Nevada’s funding structure for the state’s three child welfare agencies.

Looming over the conversation was the implementation of the massive tax and spending bill Congress passed at the urging of Donald Trump last July that authorized sweeping cuts to some of the biggest public safety nets, including Medicaid. 

The bulk of those cuts take effect in 2027, and Nevada is estimated to lose about $590 million annually in federal funding for the next 10 years, according to the nonpartisan Congressional Budget Office.

“Listen, I hear you and I think that there is a case in point in terms of whether we should re-examine how the block grants are administered and how we fund child welfare services in our state,” said Democratic State Sen. Fabian Doñate. “All of us know that H.R. 1 is coming, and there’s not enough money for everyone.”

Nevada is one of two states with a state-county hybrid child welfare administrative structure – Wisconsin is the other state.  

While the Nevada Division of Child and Family Services administers child welfare services, the most populous counties, Clark and Washoe, operate its child welfare system. 

The state operates the services in the 15 rural counties. 

Clark and Washoe counties receive an annual block grant from the state, a formula that was approved and capped by lawmakers in 2011. It went into effect the following year and has never been increased.

“If you look at today’s dollar compared to 2012, if you index that to inflation, you would need $1.48 in every one of today’s dollars to match,” said Cadence Matijevich Government Affairs Liaison for Washoe County. 

Washoe County has the same problem. 

The county received  $14.3 million in block grant funding under the state cap since 2011. If the block grant was adjusted for inflation they should receive roughly $22 million. 

Officials for both counties noted the projections presented to state lawmakers identify a slight bump in block grant funding in fiscal year 2025 but explained it was due to the 2023 Legislature approving a foster rate increase. 

While the numbers indicate a “bump,” Jacob, the Clark County official, said those dollars “pass through to the families and the kids that we serve” as part of the foster rate increase.

Administering those dollars to families increases Clark County’s workload, leading to “approximately $6 million in additional costs … related to staffing and workload that we’ve had to implement” the policy, Jacob said.

The state has passed a number of policies since 2011 designed to improve the child welfare system, including modifying reporting requirements and expanding kinship guardianship eligibility. 

Those policy changes often haven’t included more dollars allocated to child welfare, Jacob added. 

“There have been some real policy changes put into place by the Nevada Legislature, and it’s not a criticism,” Jacob said. “I think a lot of these policies, these bills, were positive ones for the families and the kids that we serve, but they did not come with resources to the counties to implement it.”

After the state block grant, the second largest funding source for child welfare comes from federal Title IV-E funding under the Social Security Act. Matijevich said the formula for that funding is also effectively restricting the provision of child welfare services. 

To qualify for funding, there must be a court finding that the removal from the child’s family was necessary and documentation showing a child was placed in a licensed or approved setting. 

The qualifications also require proof of the income and assets of the child’s foster family or guardian. The threshold was set in 1996 and hasn’t been updated, Matijevich said.

“For a household of three with one working adult who makes $12 an hour, under the 1996 standard, that adult can work no more than 118 hours per month before their income surpasses that 1996 threshold,” Matijevich said. “If the threshold were raised to the current poverty standard, that same adult could work full time making $26.33 an hour before their income would surpass the maximum.”