In Focus: Systems and Financing

Sep 23, 2016  |  PERMALINK »

Final Rule Implementing CCDBG Act of 2014 Includes Important Provisions to Support Low-Income Families

Today, the Administration for Children and Families in the U.S. Department of Health and Human Services released final regulations implementing the 2014 reauthorization of the Child Care and Development Block Grant (CCDBG). This an important step forward in implementation of the new CCDBG law.

CLASP is thrilled to see provisions included in the rule that will support low-income families in accessing more stable child care assistance to help them go to work or school and to provide important continuity for children. The final rule includes important subsidy provisions that:

  • Codify the law’s 12-month eligibility provisions so that children who receive CCDBG-funded child care will be eligible for a minimum of 12 months of assistance, regardless of temporary changes in parents’ employment or participation in education or training, as long as family income does not exceed the maximum federal eligibility level;
  • Significantly decrease the reporting requirements for families during their eligibility period so that small changes in family circumstances no longer result in abrupt disruptions to assistance; and
  • Establish a graduated phase-out of subsidies that will ensure families keep assistance as their earnings increase above the initial qualifying eligibility levels. .

Additionally, the final rule clarifies for states important health, safety, and quality provisions.

CLASP is gratified that the new regulations reflect many recommendations made by the advocacy community, and we look forward to continue working with state policymakers and advocates as they balance how to realize the important opportunities in the law for low income children and parents with the real cost burden on states given the lack of sufficient federal and state investments to date in child care.  CLASP will provide more analysis on the rule and implementation opportunities in the coming weeks. 

Aug 30, 2016  |  PERMALINK »

Declining TANF Child Care Spending Underscores Need for Major Child Care Investment

By Christina Walker and Hannah Matthews

This month, the Administration for Children and Families (ACF) in the U.S. Department of Health and Human Services released expenditure data from the federal Temporary Assistance for Needy Families (TANF) program, which allows states to use their block grants for child care assistance. TANF spending on child care decreased by $45 million in 2015. Nationally, about $2.6 billion of TANF funds were used for child care through direct spending on child care and transfers to the Child Care and Development Block Grant (CCDBG).

August marks the 20th anniversary of welfare reform, which created TANF.  As part of welfare reform, Congress made new investments in CCDBG recognizing that low-income mothers need help paying for child care so they can go to work or job training. Since TANF’s creation, states have been permitted to spend TANF directly on child care assistance or transfer up to 30 percent of block grant funds to CCDBG. After cash assistance, child care has consistently been the second largest use of TANF funds.

In the early years of welfare reform, combined TANF transfers and direct TANF spending on child care reached $4 billion. However, as the block grant has declined in value, the amount spent on child care has fallen by 35 percent and has remained near $2.6 billion or below for the past four years. In 2015, states transferred $1.3 billion from TANF to CCDBG, a decrease of $65 million from the previous year, and spent $1.2 billion in TANF funds for direct child care assistance, an increase of $17 million from the previous year.

Use of TANF funds varies greatly by state.  Twelve states transferred 30 percent of their block grant to CCDBG or a combination of CCDBG and the Social Services Block Grant: Alaska, Colorado, Florida, Indiana, Iowa, Massachusetts, Mississippi, Montana, Nebraska, Oklahoma, Utah, and Washington. Six states transferred 25-29 percent of funds – Hawaii, Idaho, New Mexico, North Carolina, Vermont, and Wisconsin. The largest declines in combined TANF funds used for child care in 2015 (including transfers and direct spending) were in: Ohio (-$49 million), Wisconsin (-$46 million), Pennsylvania (-$37 million), and New York (-$24 million). The biggest increases were in: Washington, ($34 million), Colorado ($27 million), Indiana ($23 million), and North Carolina ($17 million).  

TANF requires states to contribute maintenance-of-effort (MOE) funds, $2.7 billion of which they spent on child care.  Because a portion of TANF MOE funds spent on child care may also be counted toward states' CCDBG MOE requirement, total child care spending (CCDBG and TANF combined) for 2015 cannot be determined until 2015 CCDBG expenditure data are available.

While the net expenditure change from 2014 to 2015 is not dramatic, the overall trend is reason for distress. Prior to this latest release of administrative data, CLASP’s analysis of 2014 CCDBG and TANF data showed combined child care assistance spending at a 12-year low and the number of children receiving CCDBG-funded child care assistance at a 16-year low, with only 1.4 million children receiving any help. Not since 1998 have so few children been served.

TANF has failed poor children and their families in providing a safety net and buffering them from the harm caused by poverty. TANF is also not a reliable or sufficient source of funding for child care assistance. As states implement the 2014 bipartisan reauthorization of CCDBG, they are facing increased pressure for resources; implementing important health and safety and continuity provisions of the law could come at the cost of serving even fewer children as Congress has not allocated significant new resources. To implement the important new changes in the law without further decreasing the number of children served, CCDBG needs an immediate $1.2 billion increase in the federal 2017 fiscal year. In future years, far greater investments will be needed to ensure that more low-income families have access to affordable, high-quality child care that can support family economic stability and children’s success.

Read more about child care assistance>>

Read more about TANF >>


Aug 2, 2016  |  PERMALINK »

California Child Care Proposals Promote Economic Stability

By Christine Johnson-Staub and Hannah Matthews

This month, California policymakers have an opportunity to realize the promise of the new federal child care law by enacting Assembly Bill 2150 (AB 2150). The state bill, which was passed unanimously by the California Assembly and Senate Policy Education Committee, would strengthen child care assistance programs by supporting providers, improving stability for parents, and enhancing continuity of care for children. The next step is an August hearing before the Senate Appropriations Committee.

California’s bill would implement key provisions in the reauthorized federal Child Care and Development Block Grant (CCDBG), including a simplified eligibility process and improved stability of payments to providers. The goal is to make it easier for families to get and maintain assistance while also promoting the health, safety, and quality of child care.

AB 2150 comes on the heels of another state victory. The FY 2017 budget, signed into law by Governor Jerry Brown in July, repealed California’s Maximum Family Grant (MFG), a “family cap” policy that limited cash benefits for many low-income families. The budget also included $145 million in new early childhood investments, which will primarily be used to increase provider payment rates for subsidized child care. This is the first significant rate increase in years and will allow families to access a greater share of the child care market. Low payment rates make it financially unviable for providers to offer services for children receiving subsidies; as a result, families are limited in their child care options and many providers can’t afford to invest in quality or provide staff a livable wage.

The budget’s investment in payment rates is an important step in stabilizing California’s supply of child care as well as supporting those who provide it. However, additional funding and policy changes are needed to continue to improve the system.

AB 2150 would leverage key elements of the new federal CCDBG law to further improve financial stability for families and providers. For example, CCDBG now requires a minimum of 12 months’ eligibility (regardless of temporary changes in family income). In addition to providing continuity of care for low-income families, 12-month eligibility makes revenue more predictable for providers.

Beyond implementing these CCDBG provisions, AB 2150 would increase the income level at which families qualify for child care assistance by requiring that current census data be used to calculate eligibility. Further, the bill would allow families to remain eligible for child care assistance as their incomes increase up to 85 percent of current State Median Income (SMI), the federal income eligibility limit.

Taken in combination, these measures would go a long way toward strengthening California’s child care system, as the state suggested in its plan to federal regulators. That plan, which the Administration for Children and Families has conditionally approved, cites AB 2150 as the legislative vehicle for ensuring compliance with many provisions in the new federal law.

CLASP is encouraged by California’s efforts to expand and improve child care services for low-income children. The sheer number of needy  families— combined with a massive, complex child care system—will make it challenging to implement the new federal law, especially as it relates to cost. However, California stakeholders and policymakers have begun to rise to the challenge. Now, it falls on Governor Brown and the California Senate to make AB 2150 law and improve access to quality, affordable child care for low-income working families.

Read more about CCDBG implementation in states >>

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