The following editorials appeared in the Lincoln Journal Star.

State Health and Human Services officials were wise to back off on their original proposal to lower payments to private agencies that provide support to foster families.

HHS officials last week raised the proposed payments after a firestorm of opposition. The new, higher rates were approved by the Children’s Commission on Tuesday.

The original proposal triggered alarm among agencies and foster parents. Although it would have raised payments to foster parents, the agencies that work with them would have faced severe cuts.

Currently, private nonprofit agencies get checks from the state. Each agency decides how much goes to foster parents and how much is retained by the agency for administration and support. The amounts vary by agency.

Under the earlier proposal, the state would have mandated specific reimbursement rates for foster families.

The private agencies said the proposal left so little money that it would create yet another crisis for the state’s foster care program. Jim Blue of Cedars said the plan meant his agency would take a hit of $800,000 a year. Gregg Nicklas, co-CEO of Christian Heritage, said his agency would face a reduction of $950,000. Jodie Austin of KVC said that if the payments went into effect without adjustment, “people will go out of business, because most nonprofits cannot sustain those large losses.”

There’s little doubt HHS faces financial pressure. Federal officials in January said the state would be required to return $22 million in federal funding for child welfare because the state didn't properly track the money during its failed attempt to privatize the system. The state has provided documentation for $7 million, but still may be required to return $15 million.

But it would unconscionable for state officials to try to recoup that loss by skimping on payments to private agencies. That point was made forcefully by Sen. Bob Krist of Omaha, who pointed out that the Legislature was willing to help the troubled agency. “You know full well that the Legislature was ready and able to pay the fines that an inept DHHS managed to accrue,” Krist said in a letter to Family Services Director Thomas Pristow.

While state officials reacted quickly and properly to end the controversy, the manner in which it was handled is troubling. If HHS officials did not know how severely the cuts would hurt agencies, they should have. Gov. Dave Heineman, HHS Director Kerry Winterer and Pristow have more work to do to correct the problems in the state’s child welfare system. Nebraskans can be thankful once again for the positive role played by the Legislature in fixing problems in the administrative branch of state government.

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