More Backward Than Forward on Child Care

by Karen Schulman, Senior Policy Analyst,
and Helen Blank, Director of Leadership and Public Policy, 
National Women's Law Center  

A new study by the National Women’s Law Center of policies in the 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 their child care assistance programs. This is troubling news for the many low-income families who need help affording reliable child care that allows parents to work and gives children opportunities to learn — particularly since it follows years of stagnation in child care assistance policies and funding.

The study examines four key policy areas — income eligibility limits for child care assistance, waiting lists for assistance, reimbursement rates for child care providers serving families receiving assistance, and copayments required of parents receiving assistance. A majority of states did not make changes in these areas between February 2008 and February 2009. However, of those states that did make changes, more moved backward than forward.

In 2009, a family with an income above 200 percent of poverty ($36,620 a year for a family of three in 2009) could not qualify for assistance in over three-quarters of the states — even though a family at this income level could barely afford to meet its basic needs in the majority of communities across the country.

In many states, families cannot always receive help even if they meet the eligibility criteria. In 2009, nineteen states had waiting lists for child care assistance or turned families away without even adding their names to the waiting list.

Families who receive child care assistance often still have to contribute a significant portion of their income toward the cost of care. In seventeen states, the copayment for a family of three at 100 percent of poverty was above 7.0 percent of income in 2009—more than the average percentage of income spent by all families who pay for child care (whether receiving assistance or not). 

Low reimbursement rates leave child care providers without the resources they need to support high-quality care and deter child care providers from participating in the child care assistance program. In 2009, just nine states set their reimbursement rates at federally recommended levels. 

Since February 2009, additional funding for the Child Care and Development Block Grant made available through the American Recovery and Reinvestment Act is helping states maintain and expand their child care assistance programs and invest in initiatives to enhance the quality of care. For example, ARRA funds prevented 3,000 children in Alabama and 15,000 children in Arizona from losing their child care assistance. 

Yet, deepening state budget gaps have resulted in cuts in several states since February 2009. For example, Ohio lowered its income eligibility limit to qualify for child care assistance and reduced reimbursement rates paid to child care providers as of July. In the fall of 2009, Massachusetts, which had already limited access to child care assistance for many families, began limiting assistance for additional categories of families, including certain teenage-parent and homeless families, as well.

To prevent such cuts and enable state to make progress on their child care assistance policies, it is essential to sustain and increase child care investments. Helping the many families who are struggling in these difficult economic times gain access to affordable, reliable child care will enable parents to work and children to develop and thrive.