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Federal cuts could affect county child welfare and some other programs

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Willmar, 56201
Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

WILLMAR -- Kandiyohi County could lose $718,000 in federal funding next year for child welfare, mental health programs and services for developmentally disabled and vulnerable adults.

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The cuts could mean raising local taxes to make up the difference.

The potential for coming cuts has been known since the federal Deficit Reduction Act was signed this year to cut $99 billion from Medicaid spending from 2006 to 2015.

But what hasn't been known is exactly which targeted case programs, if any, will be singled out by the federal government for the reductions in counties.

It doesn't look like an answer will be coming anytime soon, which is making it difficult for counties to prepare for the reductions.

The federal Health and Human Services Department had initially promised an interpretation of the budget cuts early this spring so that counties could prepare. Now it appears the interpretation won't be finalized until October and sent to states, which will need time to do their own interpretation before giving direction to counties.

Counties are working on their 2007 budgets now in order to meet state deadlines. Not knowing which programs will be losing federal funding is making it very difficult to plan a budget, said Kandiyohi County Family Services Director and County Administrator-designate Larry Kleindl, who presented options for the County Board to consider during its meeting Tuesday.

Based on federal audits taking place in other states, Kleindl said the best guess is that child welfare programs will be targeted for the federal cuts.

If that's the case, Kandiyohi County would lose $397,000 a year, which represents 6.9 percent of the county's Family Services budget.

He said it may be wise to plan for that program to be cut and to plan on increasing the local levy to replace it. If it turns out the programs aren't cut, the local levy can be reduced.

After the Truth-in-Taxation hearing in November, however, levies cannot be increased.

Kleindl said every state is waiting for the federal interpretation and every county in Minnesota is "struggling with the same problem" and preparing for the potential cuts in different ways.

Some, he said, are preparing their 2007 budgets as if there will be no reductions. Kleindl said that method seemed "a bit risky."

Others are preparing their budgets as if all targeted case management programs will be cut. He said it may make sense to prepare for cuts in child welfare and be prepared to raise local taxes.

No one likes increasing taxes, Kleindl said, but when programs are necessary in order to keep people safe, there are few options but to raise money to fund them. He said he wanted the board to be aware of the situation to better prepare for the upcoming budget session.

Commissioner Richard Falk said he thought there were some "more creative ways" for dealing with the cuts "rather than dumping the whole $397,000 on the taxpayers."

The new cuts will come on top of a federal reduction for child support services that will mean an annual loss of $207,000 for Kandiyohi County. Because of state budget problems in 2003, counties also took a hit in human services program funding.

The board also received an update on a legislative change that has made assessing child protection cases more challenging. Corrine Torkelson, family service supervisor, said instead of a 90-day timeline to complete an assessment, counties now have 45 days. She said getting the face-to-face contact completed within that time isn't a problem, but getting the required documentation done in 45 days "has become an issue with us."

Torkelson said the number of child protection cases in Kandiyohi County has leveled off. She said prevention programs and existing services have been effective in keeping the numbers from increasing.

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