MayKao Fredericks won’t forget the looks in the two teenagers’ eyes when she told them she and her husband could afford to adopt their six young siblings — but not them.

“It was like letting them go off a cliff,” she recalls.

While the younger children generally have been safe and happy, the two older siblings ran into trouble with drugs, gangs and abusive relationships. “We knew, for the two we left behind, life would be hard and unfair,” Fredericks said through tears. “But we made our decision.”

Fredericks’ story reflects an ongoing problem for Minnesota’s foster care system — its struggle to find permanent adoptive homes for foster children who are older or have siblings or disabilities. And it’s why Gov. Mark Dayton has proposed $2.5 million over the next two years to overhaul payments to adoptive families.

Minnesota pays foster parents some of the nation’s highest rates — $659 to $2,291 per month, depending on children’s needs and disabilities. But it pays adoptive parents some of the nation’s lowest rates — $247 to $837 per month. That imbalance is a disincentive for foster parents to consider adopting and giving the troubled children stable lives, said Lucinda Jesson, commissioner of the Minnesota Department of Human Services.

“We just can’t allow that to continue,” Jesson said Tuesday. “Every child deserves a permanent home.”

In a plan announced Tuesday, the Dayton administration would equalize payments for foster care, relative care and adoption. The annual cost to the state would reach $8 million by fiscal year 2017, but the plan would increase the state’s allotment of federal child welfare funds.

Minnesota has 355 foster children awaiting permanent homes because their parents’ rights have been terminated. While the state has had success at rapidly returning foster children to their birthparents, when that has been deemed safe, it has fallen short of federal goals in finding homes for kids who can’t go back.

For example, of children who had already been in foster care for two years at the start of 2011, only 20 percent had permanent homes by year’s end. The federal goal was 29 percent. Almost 600 children reached 18 that year without finding permanent homes.

The payment inequity is a major reason, said Joe Kroll, executive director of the North American Council on Adoptable Children in St. Paul.

Kroll said the disparity in rates occurred because legislators were more willing to give increases to the counties that manage foster care payments than to the state, which handles adoption payments.

Some foster care rates cut

While Dayton’s proposal would create incentives to adopt older children by providing higher payment rates, it also would cut rates for a majority of foster care providers, said John Sellen, a human services manager in Hennepin County. He has been helping the state develop the proposal, which would pay foster and adoptive parents at a monthly range of $565 to $1,790 per child.

The cuts mostly would hit providers caring for younger children with special needs; a few foster parents would see an increase in rates. The cuts would take effect only for future children, not current ones in care, but foster care advocates say they are troubled.

“There needs to be some equalization, but not at the expense of the foster parents,” said Randy Ruth of the Minnesota Foster Care Association.

Dayton’s plan is based on a state study from 2005 to 2010 that compared outcomes of children in four counties. Children in a group where payment rates were equalized were more likely to find permanent homes, although that was mostly because relatives stepped up to take advantage of the payment rates and agreed to take in foster children, Sellen said. It was unclear whether the program encouraged more adoptions.

Brenda Reedy of Farmington said the additional funding helped tremendously in her adoption of two children, now 15 and 12, who have expensive medical and therapy needs. While the state Medicaid program covers the kids’ basic medical care, it doesn’t cover things such as Strattera, the drug for hyperactivity that her son needs.

“Raising kids who come out of the foster care system is even more expensive,” she said.

“What if?”

MayKao Fredericks doesn’t think it would have taken much — just a little extra funding for a nanny or respite care — for her and her husband to have adopted all eight children from one sibling group.

Even now, she worries about the girl, now an adult, they didn’t adopt. Once they called St. Paul police because they feared she was dead.

They have reconnected with the boy and steered him to support services to help him avoid homelessness and find a job.

The specter of “what if” hangs over them.

“To this day,” she said, “we all wonder.”