Growing wait list for child care subsidies taking its toll

Jacqueline Rabe Thomas / CTMirror.org

Children at Hope Child Development Center in New Haven, where most of the children receive Care4Kids subsidies

Thousands of low-income families hoping to receive child care subsidies are stuck in limbo as a wait list for the program swells.

About 3,400 needy families are now on the wait list to receive child care subsidies through the popular Care4Kids program. That number could grow to 5,000 families by this summer, advocates say. They expect 2,200 more families seeking summer-only subsidies to be turned away as well.

Any chance that number will shrink in the near future is growing less likely since the program is expected to limit new enrollment until at least until the end of June, when state officials say they can fully evaluate savings. Gov. Dannel P. Malloy has called for limiting enrollment until 2019 to curb costs in the program, which is running a $33 million deficit.

Currently, about 12,000 families are enrolled in Care4Kids, receiving child care subsidies that range from $38 to $320 per week.

The program’s current challenges emerged largely because of new federal regulations put in place last year, after Congress approved changes to the Child Care and Development Block Grant Act two years earlier.

These regulations required Care4Kids to increase the program’s enrollment period to one year – up from eight months – while limiting paperwork for parents by reducing a number of stringent, meticulous reporting requirements to prove continuing eligibility. The reporting requirements often had tight deadlines for submitting information, and resulted in many families being kicked off the program even while they still qualified.

Federal lawmakers were hopeful these changes would give working families more financial stability – which advocates say has been the case. But because families are keeping their subsidies longer, the cost of operating Care4Kids has increased, producing a sizable deficit in the program’s budget. This led to the creation of a wait list last summer to limit enrollment.

“While we feel dreadful about the impact this is having on families, we feel pretty good about the children who are receiving a stable 12 months of either child care or early care and education as a result of the changes in the federal law,” said Linda Goodman, acting commissioner of the Office of Early Childhood, which oversees Care4Kids.

“I’m not sure that under the previous set of rules that, having four months of child care on average before something happened and parents lost it, was very beneficial to the children,” Goodman added.

Advocates say the federal changes, while well intentioned, came at the cost of limiting access to the program. They fault the federal government for enacting a new mandate without providing sufficient funding.

 

Who’s in, who’s out?

Thus far, the program has avoided removing any existing recipients from its rolls, which state officials believed was almost inevitable last fall. The program’s budget gap in the current fiscal year was cut in half by closing off applications in November to all but the neediest families and taking funds from a separate state preschool program.

Care4Kids is still accepting applications from families that receive cash welfare benefits, but now turns away many who would otherwise qualify: teen parents, parents who are no longer receiving cash welfare but have within the past five years, and parents earning below 50 percent of the state’s median income.

These now-ineligible groups make up about five-sixths of the families currently receiving child care subsidies, said Daniel Long, research director at Connecticut Voices for Children. The most destitute, lowest-income families make up the remaining one-sixth.

Kyle Constable / CTMirror.org

Linda Goodman, acting commissioner of the Office of Early Childhood

All existing recipients who have proven continued eligibility have been able to keep receiving benefits – even those in the five-sixths of families who would be put on the wait list if they were applying now.

Families who are most impoverished, like the one-sixth of those currently enrolled, remain eligible to apply. Other families in marginally better financial circumstances who had not applied by the time the wait list was created last year are not as fortunate.

“It has a huge impact on families who are seeking care, because for a lot of them, they can’t afford market-rate (child care),” said Merrill Gay, executive director of the Connecticut Early Childcare Alliance. “So they may be choosing not to go back into the workforce. Or they are depending on informal care arrangements, which don’t provide kids with consistent care.”

The impact will be felt this summer when thousands of families are unable to send their children to summer camps, Long said.

“That creates a potential sort of ‘summer camp crisis’ this summer, where you have many families who will be scrambling for some place safe where they can send their kids,” Long said. “And on top of that, the support of Care4Kids for these summer enrichment programs does a lot to help narrow the achievement gap. … The largest growth in the achievement gap occurs during the summer.”

A recent study from three major child advocacy groups – Connecticut Voices for Children, Connecticut Early Childhood Alliance and Connecticut Parent Power – found the Care4Kids program is used by families in 97 percent of Connecticut’s towns, and is the only option families have in 49 percent of towns to offset the cost of child care.

And that cost is one of the highest in the nation. A study from ChildCare Aware of America found that center-based infant care in Connecticut costs an average of $14,238 per year, which the group estimates is about 60 percent of the median annual income for a millennial in the state.

How long limited enrollment will remain in effect is still in question. While the governor’s proposal to limit enrollment until 2019 has been met with strong opposition from child care advocates, early numbers coming into the Office of Early Childhood show the wait list has been effective at curbing costs so far, Goodman said.

“When we see what the budget is for next year … we should be able to make a pretty good projection of how soon we can reopen and start taking people off the waiting list,” Goodman said. “We’ve seen a drop off this year in our payments to the point where we may not even have a deficiency this year.”

While that comes as welcome news for the agency, it is not as encouraging for the state’s advocacy groups.

Gay said from January to February, enrollment in the program dropped by 915 children while the wait list grew by only 420 children. Normally, he said, roughly the same number of children enter and exit the program within a month’s span.

“That says to me that word is out that Care4Kids is closed, so people aren’t bothering to apply,” Gay said. “The wait list does not really reflect the families that need care.”

An economic toll

As federal priorities have shifted over the years, Care4Kids has had to do the same. What was originally intended to be a work support for low-income families has become what Goodman calls “a child development” program, whose higher quality and cost has reduced the number of families that can be served in tight budgetary times. This has some advocates concerned about the impact it is having on the workforce.

Concrete numbers are not available because the state Department of Labor does not track child care subsidy data against its employment numbers. However, advocates maintain Care4Kids has been essential to working families in the state.

Jacqueline Rabe Thomas / CTMirror.org

Hope Child Development Center in New Haven

“This is a program that is really cost-effective, because what it does is, it helps working families,” said Rep. Catherine Abercrombie, D-Meriden. “This isn’t a program that’s a handout. This is a program that’s a hand up, so that (parents) – especially women – can go back to work, or go to work.”

And many of the jobs they fill are essential, Long said.

“Most of these families that are able to work because of the Care4Kids support are in crucial service sectors,” Long said. “They’re the individuals who work as home health care providers. They work in child care. They work in other aspects of the service industry.”

Gay said it also has had an impact on the number of child care providers. He estimated that hundreds of licensed child care providers are no longer offering services and hundreds more informal providers have exited the industry as well.

“We’re going to start to see child care programs closing down,” Gay said. “That will hurt not only the families who relied on Care4Kids, but the other families at those centers who didn’t have Care4Kids but now don’t have a child care center.”

As these child care centers close, the shadow child care industry – those operating without a license – grows.

“We’re always concerned about illegal care,” Goodman said. “Our state has a very stringent definition of illegal care, which includes caring for even one child in your own home who isn’t your child. So that is a problem, that we’re giving parents poor options.”

“But, I have to point out again, that even the parents who got Care4Kids temporarily and then got kicked off the program were probably having the same dilemma in finding child care,” she added.

Unlicensed child care providers range in size and scope. Some unlicensed providers skirt the law to care for more children than is legally allowed because it is more profitable, Gay said.

“I’ve heard horror stories of inspectors going out and finding a basement full of cribs that hold babies in it, one mom trying to watch a whole lot of kids,” Gay said. “That’s why we have laws on ratios, to make sure kids get quality care.”

Legislation in motion

Care4Kids currently operates on a budget of about $124 million, which is a combination of state and federal dollars. Malloy’s proposed two-year budget would cut Care4Kids’ state funding by about $14.5 million by the 2019 fiscal year.

At least two legislative initiatives are underway that could change the trajectory for Care4Kids.

Arielle Levin Becker / The CT Mirror

Rep. Catherine Abercrombie

The first is an effort by Abercrombie, who is calling for the state to give Care4Kids a greater percentage of the $270-million federal block grant it receives for cash welfare benefits and other assistance for struggling families, known as Temporary Assistance to Needy Families, or TANF.

A Pew Report on each state’s TANF spending found Connecticut allocates about 10 percent of those dollars to the Care4Kids program, which is less than the national average of about 17 percent that all states spend on child care programs.

Abercrombie said she hopes this can “backfill some of the shortfall” in Care4Kids, and allow it to operate both as a work support and a child development program. Goodman would not comment on the proposal specifically, but said “any amount of increased funding would be certainly welcome.”

Gay said he does not mind the idea of changing the TANF percentages, but said he is pushing for a broader solution. He is backing a bill that would generate tens of millions in new revenue through a one-cent-per-ounce tax on sugary drinks.

That money, he said, would offset Care4Kids’ deficit and allow it to grow. Abercrombie is open to the idea as well.

“I’ve been saying since Day 1 that revenue definitely has to be on the table, that we have done the hard cuts over the past two budget cycles and we cannot just rely on cuts to get us out of this deficit,” Abercrombie said.

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