Systems and Financing

Quality child care and early education programs address the full range of child development needs, which requires their linkage with health and nutrition services, family support, and early intervention at both the state and local level. States may need to develop new governance and financing structures that assure that all the parts of a system are working in a coordinated way. Such systems encourage horizontal connections across systems--for example, child care, Head Start, state pre-kindergarten programs, and early intervention services--as well as vertical connections of services from birth to 5 to provide continuity and coordination for children as they grow. CLASP encourages states to move toward more integrated governance and financing systems and to think across systems to make the best use of resources and design an early childhood system that best meets the needs of all children and families.

May 31, 2017  |  PERMALINK »

New York Cuts Child Care Spending Amid High Need, Increased Costs

By Christine Johnson-Staub

The 2014 bipartisan Child Care and Development Block Grant (CCDBG) reauthorization took important steps to improve access to quality child care, continuity of care, health and safety for children, and economic stability for families. However, near-stagnant federal funding levels have made it challenging for states to meet new requirements.

A small number of states are increasing their investments in child care access, reasonable payment rates for providers, and meeting new federal health and safety requirements. Other states are balancing the ledger by limiting demand - restricting access and eligibility to child care assistance.

The New York State legislature has gone even further, slashing child care spending despite enormous unmet need and impending CCDBG costs. The state budget, passed in April, cut $7 million from child care subsidies for working parents who earn less than 200 percent of the federal poverty level. This could result in hundreds of children losing care.

Already, New York serves just 17 percent of children eligible for assistance. From 2006 to 2015, New York’s average  monthly number of children receiving CCDBG-funded child care fell by nearly 15,000 children—a 12 percent decline. However, hundreds of the most vulnerable younger children will struggle to access high-quality care while their parents work.

Helping families pay for child care is critical to provide economic stability and ensure high-quality care that promotes children’s development. Investing in CCDBG is essential to expand access to assistance and implement the reauthorization reforms outlined above. To date, New York and other states have delayed implementing many provisions through waiver extensions; however, those waivers are time limited, which means increased costs are on the horizon.

While New York legislators cut funding for direct assistance, they expanded a child care tax credit that targets households with incomes between $60,000 and $150,000. Middle-income families also struggle to afford child care, but the tax credit won’t reach low-income families with the highest burden. Additionally, families who pay for child care weekly or monthly won’t benefit from an annual credit. Furthermore, the policy does nothing to improve health, safety, or quality and will not prevent New York’s impending child care crisis.

At the federal level too, predictions about the Trump Administration’s plans to address child care affordability through the tax system are swirling. Congress would be wise to not follow New York’s lead. Improving the Child and Dependent Care Tax Credit must be coupled with new investments in direct assistance. Congress should increase CCDBG funding to help low-income families pay for child care as well as support states in complying with the program’s new requirements. For FY 2018, CLASP estimates an additional $1.4 billion is needed to meet reauthorization requirements without cutting assistance for more children. Without that investment, up to 217,000 children are at risk of losing child care assistance nationwide, including 9,419 in New York.

To sufficiently fund CCDBG, Congress needs to provide relief from sequestration, which has constrained non-defense discretionary funding levels. The president’s budget proposal, which marked the beginning of the FY 2018 budget process, would disinvest in key programs and take the country in the opposite direction. It demonstrates a profound misunderstanding of families’ needs.

As Congress begins their work on a federal budget, lawmakers should consider the impact of discretionary spending caps and make an affirmative choice to invest in families’ economic stability and access to quality child care.

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