Mr. CORMAN. Thank you, Mr. Commissioner.

Mr. Rangel?

Mr. RANGEL. Mr. Commissioner, I want to share your views that during this administration the Congress could remove all vestiges of the inequities that we have relating to dual citizenship.

In my view, you are either a citizen or you are not, and there should not be these seaparate standards. You can depend on my support in getting a more equitable response from the President of the United States, and I hope that citizens wherever they are would know exactly that their rights are the same.

Thank you for your eloquent testimony this afternoon.
Commissioner CORRADA. Thank you.

Mr. CORMAN. Are there further questions?

Mr. Jensen?

Mr. JENSEN. Mr. Commissioner, in your statement you indicate that the increased Federal allocations under the ceiling would not help in the short run. That is on page 9 of your testimony, and you say that is so unless the proposed formula of 50-50 matching is changed.

Can you or the secretary of social services with you give us some further background on that, either now or for the record?

My understanding was that you are now providing more Puerto Rican funds than are needed in order to draw down the Federal funds.

What are your problems as far as the matching situation?

Commissioner CORRADA. Basically, of course, we in Puerto Rico have a limited budget.

We are taxing our people very high with Commonwealth taxes, and still for the last 4 years we have had a considerable deficit in our budget, and, mind you, under the Constitution of the Commonwealth of Puerto Rico, we must have a balanced budget.

In other words, there is no alternative in the case of Puerto Rico of deficit spending, because under our financial situation, and, of course, considering the fact that we have no monetary-we cannot have our own monetary policy as, for instance, in the case of the Federal Government, and we are constrained tremendously because of the need to have this balanced budget.

For the past 4 years, we have had deficits in our budgets as a result of the recession and a decrease in Government revenues there, even though taxes were locally increased to set off the impact in the reduction of funds.

Now we hopefully expect to begin to see some recuperation in our economy, but, of course, the recuperation here on the mainland begins first and then we follow later.

At this time, I would like to state that our resources would be very, very limited, practically nil, to be able to come up with additional matching funds.

The way that we would like to see that cured is by having, of course, a more equitable matching requirement which in the case of Puerto Rico is 50 percent, and that is only something that you would have for some of the richest, most developed States.

Mr. CORMAN. Mr. Burke?

Mr. BURKE. No questions.

Mr. CORMAN. Mr. Hawley?

Mr. HAWLEY. No questions.

Mr. CORMAN. Thank you very much, Mr. Commissioner, we do appreciate your assistance.

Our next witness is Mary Sullivan, chief, children's services, California Department of Health.

Ms. Sullivan, we are pleased to welcome you to the subcommittee. If you have a prepared statement and would like to summarize it, the prepared statement will appear in the record at this point.

STATEMENT OF MARY SULLIVAN, CHIEF, CHILDREN SERVICES, CALIFORNIA DEPARTMENT OF HEALTH

MS. SULLIVAN. Mr. Chairman, and members of the committee, I am Mary Sullivan, chief of the children social services, California Department of Health. As such, I am responsible for California's adoption program, child protective services, foster care, and others impacting children. I appreciate this opportunity to appear before your committee to testify on two items on the public hearing agenda of major concern to California:

Extension of the $200 million increase in the title XX social services ceiling; and

Establishment of an entitlement program for child welfare services which are now authorized under title IV-B of the Social Security Act.

California strongly supports the extension of the $200 million increase in the title XX ceiling.

We support, it however, with the stipulation that the increase should be on the ceiling and not be specific to any one or more specified services. To do otherwise would be a violation of intent of title XX and establish an unfortunate precedent.

I would like to make a few observations related to our recommendation. In fiscal year 1972-73, the Federal allocation of the title XX funds for California was established at $247.3 million for the coming fiscal year 1977-78. This $2 million increase represents less than 1 percent; it is due solely to California's increase in population relative to the total population of the Nation. In contrast, the purchasing power of the $245.25 million authorized in fiscal year 1972-73 has decreased to $166 million in today's dollars.

Stated differently, the $245.25 million allocated to California in 1972-73 fiscal year would have to be increased to $345 million for fiscal year 1977-78 just to make the funding equivalent in purchasing power to what the State was authorized in 1972-73.

The decreasing purchasing power of the Federal funds has evoked two principal responses in California:

One: The State and local governments are now contributing increasing shares of the total social services program dollar. In the last 4 years, the State has augmented the in-home supportive services, child day care, and county social services by over $70 million.

These augmentations reflect State-established priorities. Among other effects, the State augmentations in California have resulted in expansion of the child day care program despite the decreased Fed

eral funding purchasing power. The program as funded now through title XX and total State-local money is in excess of $100 million; this is further supplemented by child day care provided through the workrelated expense allowances of the AFDC program. In contrast, in some of the 58 counties, other social services, such as protective services, such as protective services to adults, out-of-home care, healthrelated services, have been drastically cut back-some counties have had to reduce programs by up to 50 percent.

Two: California, so far, has chosen to give priority for State funding to adult in-home supportive services and child day care programs. However, it is now time to correct the deficiencies in the other programs. Were additional Federal funds to be made available, we believe California should have State and local freedom, as intended by title XX, to correct deficiencies in those other programs. To have two levels of government, Federal and State, independently establishing priorities for programs funding (for example, child day care) can only lead to further inequities. The $200 million increase should not be earmarked for any particular program.

We would recommend that it be viewed as one permanent measure to adjust the 1972-73 fiscal year ceiling for subsequent cost-of-living increase. We believe further that such escalator should be built into the ceiling for the future to reflect the reality that the national $2.5 billion ceiling of 1972-73 is in fact a progressive and significant cut or reduction in Federal benefits for social services. This is not in keeping with the context of the promise and hopes generated by the increased flexibility in people to be served and in the services to be provided under title XX.

As a temporary and expedient aid, we have supported efforts to permit the redistribution among States of the unused portion of the $2.5 billion. But at best, this only promises temporary relief and may create greater difficulty in the long run. We recognize that each year the surplus available to be redistributed must decrease, and, therefore, it cannot be relied upon by States, such as California, to offer longterm help.

Briefly stated, the current allocation approach causes us to dismantle each year a major portion of our social service network. We are not holding the line-we are sliding backwards.

In regard to the second item, title IV-B, California supports the full funding of title IV-B to the current authorized level of $266 million.

Renewed Federal leadership and funding support for a nationwide system of child welfare services is critical to strengthening family life, improving the health and welfare of children, and reversing the trend of lengthy foster care placements for children.

In terms of the testimony this morning, the administration was looking at a comprehensive plan for child welfare services. California certainly supports a comprehensive plan approach but what California and other States are looking for in the form of Title IV-B funds now are resources to provide very basic services, child welfare services, that could be the cornerstone of the administration plan. We, therefore, would like to see the full funding for those services now.

In regard to our recommendation, I would like to comment: California has two urgent needs for increased Title IV-B funds-First:

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Expansion of protective services to children and families traumatized by abuse.

By protective services, I mean those activities or responses that public agencies make when they receive a report of child abuse and neglect. The public agency is required to respond to reports received from the community, from the welfare department, from relatives living both in the home and outside the home, from neighbors, schools, doctors, and hospitals.

The public agency through its staff responds to each report, makes an assessment of the situation, takes whatever steps are necessary to be sure the child is in safe circumstances. The public agency has responsibility for developing a plan and managing that plan to see that the child remains in safe circumstances and that the family circumstances are stabilized or a permanent plan is made.

The need for expanded protective services is reflected in the number of incidents of reported child abuse and neglect. In 1972, there were 43,113 referrals for protective services to country welfare departments. In 1975, the number of such referrals was 58,715. The breakdown of the 1975 referrals further dramatizes the magnitude of the problem; 13,177 were referred because of physical abuse, deprivation, or sexual abuse.

The remainder of the referrals were related to general neglect of such a serious nature that intervention of the public social service agency was required.

County welfare departments are unable to meet the need for increased professional social service staff with th current funding level of title XX and title IV-B. In some California counties social work staff have publicly stated that they are unable to respond effectively to protective service referrals because of high caseloads.

In addition to the increased need for professional staff, California has identified the following program needs to strengthen the Statewide protective service program.

One: We need to promote a comprehensive community approach to prevention and treatment of child abuse and neglect.

The answer to this particular problem is not found in any one system. It does require a total community approach.

Two: Stimulate public awareness of not only the requirement to report cases of abuse but to recognize potential cases of abuse.

In many cases where a child has been abused, if we go back in history, we find that community agencies were aware of potential problems, but steps were not taken in time to prevent the actual abuse. We need to develop new techniques and new strategies for dealing with the problem.

Next: We need to promulgate methods and perfect skills of practitioners in dealing with parents and children through statewide training efforts, professional conferences, and professional literature. Once we have determined that there is a new technique for working with such families, we need to make it a statewide effort.

We need to expand the capabilities and tools of the protective service workers for dealing with the complex causes of family disfunctioning which has resulted in child abuse. Those tools I am referring to are supportive services such as the availability and use of housekeepers, parent education, and so forth.

We need to provide expert consultation and support to protective service workers in diagnosis and decisionmaking. It is a very lonely world when they are out there making an assessment, making the decision as to whether or not to remove the child from the home, and deciding what kind of treatment is necessary for the family. I think they need more support than they are currently getting or that we are currently able to provide.

Our second area of need for title IV-B funds relates to the expansion of professional and other supportive services to children and families to prevent unnecessary foster care placements and to provide reunification services to reestablish children in their own families following a foster care placement.

California has recently passed the Family Protection Act providing for a 4-year demonstration project in two counties. The act provides for intensive use of family reunification and protective service resources to forestall foster care placements combined with an expanded rule of the court in placing children in need of such service. The expanded role of the court that we are speaking of here relates to, once the services have been offered to the family and/or have provided to reunite the family, and the decision is made that this cannot occur, the agency is responsible for moving into permanent planning for the child. In that sense, we then engage the court. Significant cost savings in the program are anticipated, but the real benefits will be to the children served in the program.

In California, approximately 12,000 children enter foster care each year. I would like to comment that the percentages in my statement are changing as counties are being forced to move toward total courtordered placements in order to meet the Federal fiscal policies under title IV-A.

Thirty-six percent of the children remain less than 6 months, however, 35 percent remain over 2 years. Approximately 77 percent of the children are placed in family homes at an average monthly cost of $182, while 25 percent are placed in institutions at an average monthly cost of $775. These placement costs are statewide averages, and in some of the larger counties with metropolitan areas the average cost for the individual county is higher.

The following assumptions were made by California as we entered into our demonstration project. Given the availability of the full range of family reunification services, the following projections were made in regard to the change in the foster care caseload.

In the voluntary placement program, we estimated 50 percent of the children entering foster care, now and remaining less than 6 months would never enter foster care. They come from families that are intact, there is a strong parent-child relationship, and we feel that with the utilization of other services, the children could remain in their own homes.

Of the children now entering foster care and remaining now less than 12 months, 20 percent would never enter foster care. We looked at the reasons why children leave foster care, and they the very closely to a strong child-parent relationship.

We estimated that the length of time that the remainder would stay in foster care would be reduced by 50 percent.