More than 16,000 Texas children are presently in foster care. However, this crucial safety net for thousands of the state’s most vulnerable residents has experienced challenges in recent years.

Children are spending nights in offices and hotels because there aren’t enough places to stay, reports of ongoing abuse and neglect make headlines, a federal judge called the system broken and mandated changes, and it is difficult to keep caseworkers from quitting.

The process of evolving the system in an innovative manner to better meet the needs of the affected young people at a critical juncture in their lives has begun, and it is important that we devote the resources required to make it happen as quickly as possible. While the primary consideration in any conversation related to transforming the foster care system must always be the well-being of the children and families who are affected, improvements also involve quantifiable economic benefits in the form of reduced social costs and increased earnings and productivity.

Analyzing these economic benefits can help inform discussions of future strategic plans, particularly given the reality of tight budgets for social services. Earlier this year, we were asked to study the potential economic and fiscal effects of Foster Care Redesign. We found that redesign not only can improve the lives of Texas children, but also makes economic and fiscal sense.

Successfully redesigning foster care in Texas not only can have immeasurable benefits for the individuals involved, but can also both increase the opportunities and future earnings potential of affected young people and decrease the quantifiable costs of child maltreatment through better safety and stability.

Texas has one of the largest foster care systems in the United States. Administering the system from a central location in Austin has contributed to a number of challenges. In addition, complexities in oversight, payment, and other aspects of the process at times hampered the ability of the system to meet the needs of the youth of Texas.

Foster Care Redesign changes the way the Department of Family and Protective Services procures, contracts, and pays for foster care and other services to children in foster care and their families. The key change is a shift from a statewide to a community-based model in which a single contracted entity, the Single Source Continuum Contractor (SSCC), is responsible for ensuring the full continuum of foster care and other services for children in specific geographic areas (catchment areas) and is accountable for these children achieving positive outcomes while in foster care.

About two years ago, Our Community Our Kids (OCOK) began operating as the SSCC for a six-county area including Fort Worth and counties to the west and southwest (the Region 3b service area as defined by the Texas Department of Family and Protective Services). Since that time, there have been notable improvements.

Redesign can also reduce social costs associated with child maltreatment such as lost potential output from workers not available due to health issues and social dysfunction and the associated effects through the supply chain and reduced consumer spending. The vast majority of children who enter the foster care system have been subjected to some form of maltreatment, and foster care reforms have been shown to reduce the incidence of repeated child maltreatment and to mitigate the effects of earlier abuse in other areas, specifically with respect to some of the programs that are being successfully implemented by Our Community Our Kids.

If Foster Care Redesign were implemented statewide and achieved the levels of success that have occurred elsewhere, the economic benefits associated with each annual cohort would include an estimated $3.6 billion in gross product as well as 41,008 person-years of employment. Economic activity associated with statewide implementation generates incremental long-term tax receipts to the State of an estimated $202.4 million, with another $97.8 million to local government entities as a result of each cohort.

Although redesign efforts can initially be more costly, the long-term benefits in terms of reduced social costs and increased earnings and productivity of the affected individuals lead to sizable fiscal benefits over time. In fact, we estimate that every dollar of State funding required for Foster Care Redesign returns an estimated $3.44 in ultimate revenue or reduced costs to the State.

The recently appointed head of the state’s foster care system, Commissioner H.L. “Hank” Whitman, said in a July letter to Governor Abbott that “we must rejuvenate and aggressively expand our Foster Care Redesign program. Results from our current contract are impressive: placements are more stable; brothers and sisters are staying together; and the provider network is at an all-time high in both quality and quantity.”

I couldn’t agree more. Better serving and protecting Texas children is, of course, the first and foremost reason for reforming the foster care system. However, improving outcomes through redesign can lead to increased productivity and earnings as well as reductions in social costs associated with child maltreatment.

Implementing reforms in Texas’ large foster care system involves notable challenges. However, such initiatives are well worth pursuing, not only for the well-being of the children involved, but also for the ongoing economic benefits and long-term fiscal sustainability of the system. The more rapidly and effectively we fix the system, the better for the children who depend on it and the taxpayers who sustain it.