First Step in Funding Kids' Services in Next State Budget

While thousands of bills are filed in each legislative session, many observers have pointed out that the most important one for Texas kids and families is the state budget bill.

State agencies recently took an important step in the budget-writing process when they released their Legislative Appropriations Requests (LARs). The Speaker of the House, the Lt. Governor, and the Legislative Budget Board (LBB) will use those LARs to help them write the first draft of the state budget, which is typically released early in the legislative session.


In many cases, the most instructive part of an LAR is the Exceptional Items, which represent the state agency’s list of high-priority funding needs beyond the “baseline” budget. (Take a look at this policy brief from CPPP for an explanation of the instructions state leaders gave to state agencies for crafting their baseline budgets.) Agencies’ approaches to Exceptional Items often vary. For example, the Texas Education Agency has three Exceptional Items in its LAR while the huge Health and Human Services Commission requested funding for 58 Exceptional Items.

Texans have an opportunity to provide input on the LARs at Legislative Budget Board hearings. Upcoming LAR hearings include:

  • Department of State Health Services (DSHS) - September 10th

  • Texas Education Agency (TEA) - September 12th

  • Department of Family and Protective Services (DFPS) - September 14th

  • Health and Human Services Commission (HHSC) - September 19th

We are continuing to analyze the LARs in preparation for these hearings.

In the meantime, here are a few initial takeaways from the LARs regarding key children’s issues:

Student Mental Health

As we said in our recent statement, TEA’s request for $54 million for a Safe and Healthy Schools Initiative is a good starting place to help schools address student mental health. The proposal provides for one year of grant funding to schools to help them with things like student mental health supports, educator training in trauma-informed practices, suicide prevention, and schoolwide practices to improve school climate. Schools could also choose to use these funds to “harden” their facilities, including increasing a school officer or school marshal presence. (As the recent House Public Education Committee report notes, districts should ensure school police officers are working to address school security rather than student misbehavior.) The request would also support districts with training and technical assistance to help guide schools in addressing student mental health and school climate based on best practices.

We applaud TEA for its leadership and vision. However, the one year of grant funding will not go very far in a state with over 8,700 public schools across more than 1,200 school systems and charters. The Legislature will need to provide additional and ongoing funding to address the health and safety needs of Texas students, schools, and communities.

Much attention has been given to the mental health of students by legislators, the Governor, school districts, and others during policy discussions about school safety, youth suicide, and the trauma of Hurricane Harvey. So we are surprised the HHSC request does not reference the public mental health system’s role in addressing student mental health or offer targeted opportunities to help improve student access to services, either in school or in the community. Some of HHSC’s Exceptional Items can play a role in keeping students mentally well and safe, such as the requests to increase access to community-based behavioral health services for children (and adults), increase access to psychiatric residential treatment services for children at risk of entering the foster care system, and continue funding for community mental health grants that were established last session. Yet, the requests do not appear to address the importance of collaborating with schools or beefing up youth suicide prevention efforts to address the current crisis in Texas.

Early Childhood Intervention (ECI) for Babies and Toddlers with Disabilities and Delays

After years of underfunding ECI, and the Legislature’s 2015 decision to cut Medicaid reimbursement rates for therapies for children with disabilities, a number of community organizations have closed their ECI programs, and the number of children receiving services has declined.

So we are glad to see that HHSC’s request includes a robust Exceptional Item request of $71 million (All Funds) for ECI to address this challenge. The LAR goes on to note:

“In the past eight years, 18 providers have left the program due to inadequate per child funding. As such, the burden of covering larger, and often more rural, areas can shift to the remaining contractors and the costs associated with serving new counties may not be covered by that provider’s contract. The contractors assuming these risks and challenges often do so knowing they will lose money when starting out, but make this commitment due to their dedication to the children and families they serve. Additionally, children and families feel the effects of contractor transitions as they develop close relationships with providers which can be lost when contractors exit the program. The time needed to re-establish this relationship once a new contractor is fully operational can translative to negative consequences for families. As ECI only serves children from birth to age three, providers have a short time to make a difference; every day can impact a child and family’s future.”

Child Protection

First, it’s important to note that the DFPS request points to the strides that the agency has made following the substantial investment the Legislature made in late 2016 and during the 2017 session. For example, the LAR states:

"DFPS was able to reduce caseworker turnover in CPS and Child Protective Investigations (CPI), reduce caseloads to provide higher quality casework, reduce the need for overtime, and increase provider capacity. Properly resourcing the legacy foster care system has also helped to ensure that the CBC model will have sufficient resources and is positioned to be successful.

"Turnover in Investigations has dropped more than 14 percent, from 30.5 percent in July 2016 to 26.2 percent in July 2018. Similarly, investigative average daily caseloads have dropped more than 22.5 percent, from 16.4 in July 2016 to 12.7 in July 2018. Family-Based Safety Services (FBSS) and Conservatorship (CVS) have seen similar decreases and both are now below 20.0 percent.

"PEI [Prevention and Early Intervention] expanded its array of evidence-based services during the FY 2016-17 biennium to serve 24,909 more families and youth, in 61 more counties, and increase the level of evidence-based programs and community initiatives to support children before they are abused and neglected. In the FY 2018-19 biennium, PEI projects to serve 128,000 families and youth, more than 98% of whom it expects to defer from both child protection and juvenile justice."

Among the $410 million in DFPS’ Exceptional Items in the new LAR, the most substantial requests focus on maintaining current caseloads for caseworkers, investigators, and statewide intake staff as well as maintaining client services (such as child care and behavioral health support for parents in at-risk families). There are also Exceptional Item requests for strengthening the CPS workforce and agency operations as well as additional funding to expand community-based care to other regions of the state. And we’re pleased to see the Exceptional Items include funding to expand effective prevention and early intervention (PEI) programs.

As we’ve noted, under the new federal Family First Prevention Services Act (FFPSA), Texas’ use of federal child welfare dollars must expand alternatives to congregate care (i.e. group homes and centers) to better serve children in foster care. It also offers Texas an opportunity to enhance services that keep at-risk families safely together, including those with substance use disorders and families led by teen parents in foster care. The LAR has a “placeholder” Exceptional Item for implementing the FFPSA. This will be one of the major children’s issues for legislators to address in the coming year.

Juvenile Justice

We appreciate the Exceptional Item in the Texas Juvenile Justice Department (TJJD) request to increase funding for local juvenile probation departments in order to reduce the number of youth who are committed to unsafe and ineffective state secure facilities.   

Nonetheless, even with juvenile populations in state facilities expected to decline, the TJJD Exceptional Item requests for state secure facilities (to address issues including staffing ratios, security measures, and construction needs) are actually greater than the amounts requested to increase capacity at the probation level to keep more kids closer to home. The LAR demonstrates that continuing to address the funding needs of state facilities makes it more difficult to prioritize supports for youth in their community.

Maternal Health

Texas leaders have work to do to improve maternal health policies in order to prevent maternal deaths, prevent pregnancy and childbirth health complications, and support healthy pregnancies and healthy babies.

We are pleased to see that DSHS’ request includes maternal health as one of its priorities (although the Legislature will have to take additional steps to address maternal health). The agency’s request includes an Exceptional Item for $7 million over the biennium to continue critical work implementing maternal safety initiatives statewide -- such as promoting safety protocols in hospitals across the state -- and providing tools and trainings to ensure identification and care coordination for women at high risk of adverse maternal outcomes.

Medicaid Managed Care

Interim hearings and recent news articles have highlighted challenges in Medicaid managed care, which is a critically important health insurance program for many Texas kids (including all children in foster care), pregnant women, seniors, and people with disabilities. Underfunding as well as challenges with provider networks, access to medical services, complaint tracking, and appeals processes can have devastating consequences for everyday Texans in the program.

HHSC provides the primary oversight for the program. We are glad to see that HHSC’s request points out the importance of improved managed care oversight. Yet, the agency’s request does not include a specific funding request at this time; rather, HHSC notes it will work with the Legislature to identify future needs to improve its oversight of managed care.


Although it’s not a surprise, it’s important to note that TEA’s request does not include funding for pre-k beyond the traditional half-day funding per pre-k student that is included in the school finance system. During the 2017 legislative session, lawmakers eliminated funding for the pre-k grant program they had established in 2015 in collaboration with Governor Abbott.

The LAR is a reminder that state leaders need to come back together to establish a plan for investing wisely in early childhood education.

Child Care

The Texas Workforce Commission (TWC) request reflects the substantial increase in federal Child Care Development Fund (CCDF) funding available to states.

We are grateful that TWC is maximizing the influx of CCDF funds to increase reimbursement rates for child care providers, expand partnerships with pre-k, support targeted quality initiatives focused on infants and toddlers, and support additional professional development opportunities.

Substance Use Disorders

As evidenced by a number of legislative hearings this year, there has been a growing recognition by state leaders that they must do more to address the opioid epidemic and other substance use disorders.

HHSC’s LAR acknowledges the need to address that issue through a $45 million (All Funds) Exceptional Item request, which seeks to build capacity and increase access to substance use treatment for youth and adults. Given that substance misuse typically starts during adolescence, we’re disappointed the agency did not request funds to enhance its substance abuse prevention efforts. The Legislature will need to consider whether the agency’s request is adequate to address the high level of need identified during recent legislative hearings.