Child Care Subsidies
Child care subsidies make quality child care more affordable, support the healthy development of children, and help low-income parents access the child care they need to go to work or to school to support their families. CLASP develops and promotes child care subsidy policies that expand access to assistance for low-income families, improve the quality of child care across settings, and help child care providers access the supports they need to provide high-quality care. We analyze state and national child care subsidy data to help advocates and policymakers better understand state policies and make the case for effective policies. For state child care assistance fact sheets, go to In the States.
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.
- Dec 04, 2015 TANF Spending on Child Care Up Slightly in 2014
- Jun 09, 2015 Implementing the Child Care and Development Block Grant Reauthorization: State by State Fact Sheets
- HANNAH MATTHEWS (CLASP), KAREN SCHULMAN (NWLC), JULIE VOGTMAN (NWLC), CHRISTINE JOHNSON-STAUB (CLASP), AND HELEN BLANK (NWLC) | Apr 01, 2015 Implementing the Child Care and Development Block Grant Reauthorization: A Guide for States
- Child Care and Early Education | Jun 08, 2015 Child Care Assistance: A Vital Support for Working Families
- Stephanie Schmit and Rhiannon Reeves | Mar 30, 2015 Child Care Assistance in 2013
- Christina Walker and Rhiannon Reeves | Sep 14, 2015 Child Care and Development Block Grant Participation in 2013
- Christina Walker and Rhiannon Reeves | Sep 14, 2015 Infants and Toddlers in CCDBG: 2013 Update
- Christina Walker and Rhiannon Reeves | Sep 14, 2015 Preschool-Age Children in CCDBG: 2013 Update
- Christina Walker and Rhiannon Reeves | Sep 14, 2015 School-Age Children in CCDBG: 2013 Update
- CHRISTINE JOHNSON-STAUB (CLASP), HELEN BLANK (NWLC), AND KAREN SCHULMAN (NWLC) | Jul 28, 2015 Webinar: How the New CCDBG Law Could Impact Low Wage Workers