In April of 1990, the City of Philadelphia and other Pennsylvania counties sued the state, challenging the Department of Public Welfare’s “cap” on reimbursement to counties for mandated services to dependent and delinquent children. Juvenile Law Center represented a class of dependent and delinquent children, siding with the counties.
Act 148 of 1976 had required the state to reimburse counties roughly 75 percent of the cost of mandated services to dependent and delinquent children. In the late 1970’s, the state decided to “cap” reimbursement. When more children entered care in the late 1980’s, due to the crack epidemic and an increase in juvenile crime, counties toward the end of each fiscal year found themselves paying 100 percent of the cost of care. The state had stopped reimbursements when the cap was reached. The result was an enormous burden on county budgets.
The lawsuit was quickly settled and required that the Commonwealth establish a “needs-based” budget process to ensure that the needs of Pennsylvania’s at-risk children were met with a predictable and adequate funding source. In 1991, the General Assembly incorporated the needs-based budget requirement into Pennsylvania law, making it the first state to do so. Under the needs-based budget process, counties submit proposed budgets that, if reasonable, must be approved and funded by the state.