In Focus: Child Care Subsidies

Nov 24, 2015  |  PERMALINK »

TANF Spending on Child Care Up Slightly in 2014

According to 2014 data on the Temporary Assistance for Needy Families (TANF) program, states spent slightly more TANF funds on child care assistance than they did the previous year. The data show an increase of $137 million (from $2.5 billion to $2.6 billion) over the 15-year low seen in 2013.  These figures reflect the total amount of TANF funds used for child care, combining direct expenditures and transfers.

Under federal law, states have the option to use TANF funds to provide child care assistance to families in need. They can do so by spending funds directly on child care under their state TANF programs or by transferring money into the state Child Care and Development Block Grant (CCDBG) program. In 2014, direct spending on child care assistance totaled $1.2 billion, a $122 million over 2013. TANF transfers to CCDBG nominally increased by $15 million to $1.4 billion. Only nine states transferred 30 percent of their block grant (the maximum amount allowed) to CCDBG or a combination of CCDBG and the Social Services Block Grant (SSBG): Florida, Idaho, Indiana, Iowa, Massachusetts, Mississippi, Montana, Nebraska, and Oklahoma. Seven additional states transferred 25-30 percent of their TANF funds: Minnesota, New Mexico, North Carolina, Pennsylvania, Vermont, Washington and Wisconsin.

State TANF maintenance of effort (MOE) spending also rose slightly over 2013 levels, according to the data. Under TANF, states are required to maintain the levels of state dollars targeted at needy families, based on their historical spending.  In 2014, states reported spending $2.5 billion that could be claimed toward the TANF MOE requirement (an increase of $181 million from 2013). A portion of TANF MOE funds spent on child care may also be directed toward states' CCDBG MOE requirement. 

The Administration for Children and Families has yet to release FY 2014 expenditure data for CCDBG, making it impossible to determine total child care spending (CCDBG and TANF combined) for 2014. CLASP will provide additional analysis when the data are released.

These increases in state TANF spending on child care, though small, are significant. Because the TANF block grant has not received a funding increase since its establishment in 1996, it has lost more than one-third of its value to inflation. While child care remains a priority for states, they face tough choices with limited dollars and many areas of need. The history of TANF and CCDBG state spending illustrates the dramatic consequences of consolidating programs into block grants with limited funding. Despite recent increases in state spending, fewer than one in six children eligible for child care subsidies under federal CCDBG guidelines actually get help. Further, CCDBG participation is at an historic low.

As CLASP noted in TANF and the First Year of Life: Making a Difference at a Pivotal Moment, it’s essential that we revisit state TANF investments and develop new policies and priorities that place a two-generational model—especially serving very young children and their families—at the center of state TANF plans. Child care expenditures are a critical part of this approach and could include:

  • Guarantees of access to the highest-quality child care for TANF families.
  • Assurances that CCDBG reauthorization provisions regarding quality and continuity of care are applied to TANF-funded child care to ensure TANF families have access to these vital improvements.
  • Referrals for TANF families with infants to home visiting programs and Early Head Start. Such referrals could include credit toward their TANF work requirements. and
  • Development of partnerships and intensive services to serve TANF families who have young children.

The small increase in TANF funds for child care provides some optimism that states will reverse decades of underspending.  As state agencies examine their spending, the opportunity to increase investment in child care and better serve young children and their families through TANF should be a top priority.

For more information on overall TANF spending in 2014 >>

Nov 19, 2015  |  PERMALINK »

Child Care Reauthorization One Year Later, Further Investments Needed

By CLASP

One year ago today, President Obama signed the first reauthorization of the Child Care and Development Block Grant (CCDBG) in nearly 20 years. CCDBG is the major federal program that provides funds for child care assistance so low-income families can work or get education or training to improve their economic stability and to improve the quality of child care for all families. In addition to being a work support for parents, CCDBG provides access to early childhood educational experiences and after school programs for 1.4 million children.

The reauthorization made long-overdue changes to the child care program by setting basic health and safety standards, such as CPR training for child care providers and on-site inspections for compliance with standards. It made improvements so that parents would have more stable child care financial assistance supporting their employment and education success and continuity for their children to remain in child care settings over time.

The renewed CCDBG aspires to improve the quality of child care and to ensure that more low-income and vulnerable children, including those with special needs and those experiencing homelessness, have improved access to high-quality settings. That vision represents a necessary turnaround from the current trajectory of the program. In recent years, CCDBG has served fewer and fewer children, and the quality of child care accessed by many low-income children remains poor. Yet, that vision cannot come to fruition without investment.

When passing the bipartisan CCDBG Act, Congress acknowledged that new funding would be necessary to meet the goals of the program. New requirements necessitate additional funds that Congress should appropriate. For example, the law requires background checks on workers to improve safety for children and inspections to ensure that centers and providers are compliant. These and other provisions will create new costs for states.

Across the country, for the past year, states have been implementing the new law—reviewing current programs for improvement, convening stakeholders to craft new policies, and passing legislation to codify new requirements. States also have been grappling with how they will successfully implement the promising provisions of the new law with limited funding. CLASP has engaged with state child care administrators and advocates to discuss these important issues and tradeoffs and has created a guide to help explain the law by exploring key provisions and providing recommendations.

CCDBG is serving the fewest number of children in its history. If federal and state legislators do not appropriate sufficient resources, additional children and families will lose access to a program that plays an important role in supporting their chances of achieving economic success. Moreover, the lofty goals of the legislation will fail to be realized.

The CCDBG reauthorization is a moment of opportunity, and now is a critical time. With increased public attention on the importance of the early years for children's development, as well as the struggles that so many families face in accessing affordable, high-quality child care, CCDBG offers a chance to make immediate improvements in the nation's child care. Right now, Congress stands at a significant crossroads: current appropriations negotiations over the federal budget offer policymakers a unique opportunity  to provide much-needed resources to fully fund the reauthorization to make vital improvements to the nation's child care system and expand access to enriching experiences for young children that support their healthy development and school success. The way forward is clear. Congress must act now for young children and their families.

Find further CLASP CCDBG resources here>>

Sep 14, 2015  |  PERMALINK »

Release of 2013 CCDBG Participation Fact Sheets

By Christina Walker

CLASP has released new fact sheets with participation information on children and families using federal Child Care and Development Block Grant (CCDBG) funds to help policymakers, administrators, advocates and others understand the impact and reach of the program.   CCDBG funds can be used by states to provide child care assistance to children from birth to age 13. Child care subsidies help make quality child care affordable for low-income parents, increasing the number of low-income children in high-quality care and supporting their development, while also strengthening their families’ economic security.

Based on state-reported data from the federal Office of Child Care, the fact sheets detail variations in child care subsidy programs across the country. Overall, in 2013:

  • The number of children served by CCDBG continues to fall, with fewer than 1.46 million children served on average each month in 2013. This represented the fewest children served since 1998.
  • Of children served by CCDBG, 43 percent were white; 42 percent were black or African American; 3 percent were multi-racial; 2 percent were Native Hawaiians or Pacific Islanders; 1 percent were Native American or Alaskan Native and Asian. Twenty-two percent of children served were Hispanic or Latino, regardless of race.
  • Ninety-four percent of families receiving child care subsidies were working and/or in an education or training program.
  • Seventy percent of children were cared for in center-based settings, 19 percent in family child care homes, 6 percent in group homes, and 4 percent in their own homes.
  • Sixty-four percent of CCDBG families paid co-payments for child care; for those families with a co-payment, the mean amount was 7 percent of family income.

Fact sheets on infants and toddlers, preschoolers, and school-age children highlight information about child care assistance through CCDBG in 2013:

  • Twenty-seven percent of children served were under age 3, 39 percent were ages 3 through 5, and 34 percent were ages 6 to 13.
  • Sixty-seven percent of infants, 72 percent of toddlers, 76 percent of preschoolers, and 64 percent of school-age children receiving CCDBG were cared for in center-based child care settings. A family child care home was the second most common setting across all age groups.

The fact sheets are based on 2013 final data.  The 2014 preliminary data was recently released by the Office of Child Care, and analysis is forthcoming.

State-specific information on CCDBG participation is also available via CLASP’s DataFinder tool.

View CCDBG Participation in 2013 fact sheet here>>

View Infants and Toddlers in CCDBG: 2013 Update here>>

View Preschoolers in CCDBG: 2013 Update here>>

View School-Age Children in CCDBG: 2013 Update here>>

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