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For Immediate Release: Tuesday, September 29, 2009
Contact: Adrienne Ammerman, 202-588-5180
STATE CHILD CARE POLICIES:
LOSS OF GROUND IN AN ALREADY BLEAK LANDSCAPE
New Report Finds Low-Income Families Struggle to Access Affordable, Good-Quality Child Care
(Washington, DC) A study released today by the National Women’s Law Center (NWLC) of child care policies in 50 states and the District of Columbia reveals that between February of 2008 and February of 2009 more states made cuts than made improvements in desperately needed child care assistance, worsening an already bleak landscape for parents trying to afford reliable child care.
The study also provides a preliminary look at the response of states since February 2009 to both worsening state budget deficits and the availability of new child care funds from the American Recovery and Reinvestment Act (ARRA). Since February 2009, some states are proposing to or have cut their child care assistance programs but other states have used ARRA funds to maintain or expand their programs.
“The current economic downturn has forced parents to count pennies when it comes to providing for their families, but child care is a basic that no family can afford to be without. Unfortunately, child care has been under-funded for years, and several states have cut their assistance programs in the last year. But the funding from the American Recovery and Reinvestment Act has, since February 2009, helped states stave off further cuts in these critical programs,” said Nancy Duff Campbell, NWLC Co-President.
NWLC’s report, State Child Care Assistance Policies 2009: Most States Hold the Line, But Some Lose Ground in Hard Times (available here: http://www.nwlc.org/pdf/nwlcstatechildcareassistancepolicies2009.pdf), analyzes changes in state assistance in four areas: reimbursement rates for providers serving families receiving child care assistance, income eligibility limits to qualify for assistance, waiting lists for assistance, and co-payments required of parents receiving assistance. The study found that between February 2008 and February 2009 a majority of states did not make changes in their key child care assistance policies. However, of those states that did make changes, more moved backward than forward— reducing reimbursement rates, limiting eligibility, placing more children and families on waiting lists or increasing parent co-payments. Moveover, most states did not advance or fell further behind in one or more policy areas since 2001.
NWLC’s analysis compares child care assistance policies in 2009 to 2008 and 2001; NWLC uses 2001 as a basis for comparison because it was just after the peak TANF funding for child care in 2000 and just before the peak of CCDBG funding in 2002.
The primary source of federal funding for state child care assistance comes from the Child Care and Development Block Grant (CCDBG) and the Temporary Assistance for Needy Families (TANF) program. Both programs have been insufficiently funded; for example, the FY 2009 funding level for CCDBG, even with the ARRA funding, is only slightly above the FY 2002 funding level after adjusting for inflation.
Reimbursement Rates
States determine reimbursement rates for child care providers who care for children receiving child care assistance. Low reimbursement rates deprive child care providers of resources crucial for supporting high-quality care and can discourage high-quality providers from serving families receiving child care assistance.
Just nine states had reimbursement rates for providers at the federally recommended level in 2009, compared to 10 states in 2008 and 22 in 2001. As in 2008, approximately two-thirds of the states had higher reimbursement rates for higher-quality care providers in 2009, but in more than half of these states, even the higher rates were below the federally recommended level.
“Failing to compensate providers sufficiently makes it difficult for families to obtain high-quality child care and for providers to keep their doors open, retain qualified staff or acquire the supplies necessary to promote children’s learning,” said Helen Blank, NWLC Director of Leadership and Public Policy.
Income Eligibility
A family’s ability to obtain child care assistance also depends on a state’s income eligibility limits, including whether a state makes annual adjustments for inflation to eligibility limits so that families do not become ineligible for assistance merely because their income keeps pace with inflation.
Between 2008 and 2009, three states decreased their income eligibility limits and 13 states failed to increase their limits sufficiently to keep pace with inflation, as measured against the increase in the federal poverty level. Although nine states raised their income eligibility limits for child care assistance sufficiently to surpass inflation between 2008 and 2009, in half the states the income limits in 2009 were lower as a percentage of poverty than in 2001.
Waiting Lists
Families who qualify for child care assistance generally have no guarantee that they will receive it. Instead, a state may place eligible families on a waiting list or turn away families altogether.
In 2009, 19 states placed families on the waiting list for child care assistance or turned away families without even adding their names to the waiting list. This was worse than 2008, when 17 states had waiting lists, but it was an improvement since 2001, when 22 states had waiting lists.
Co-payments
If states set co-payment rates too high, families may have difficulty meeting them or may be discouraged from participating in the child care assistance program at all.
In approximately one-fifth of the states, depending on family income, families receiving child care assistance paid a higher percentage of their income in co-payments in 2009 than in 2008. In three-fifths to four-fifths of the states, families paid the same percentage of their income in co-payments in 2009 as in 2008, and in a few states families paid a lower percentage of their income in co-payments. However, in two-fifths to three-fifths of the states, families paid a higher percentage of their income in co-payments in 2009 than in 2001.
Developments Since February 2009
Since February 2009, in the face of worsening state budgets, five states reported that they have cut their child care assistance programs. However, the 30 states that reported the ways in which they are using ARRA funds said they are using the funds to maintain or expand access to child care assistance and improve the quality of care.
Karen Schulman, NWLC Senior Policy Analyst, and Helen Blank, NWLC Director of Leadership and Public Policy, are co-authors of State Child Care Assistance Policies 2009: Most States Hold the Line, But Some Lose Ground in Hard Times, available here: http://www.nwlc.org/pdf/nwlcstatechildcareassistancepolicies2009.pdf.
To talk to a NWLC policy expert – or for specific state-by-state information – please contact Adrienne Ammerman at 202-588-5180 or aammerman@nwlc.org.
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