Illinois to Child Care Providers: The Coffer’s Run Dry
May 03, 2012
By Hannah Matthews
Child care providers receiving government subsidies in Illinois have received notice that the state can no longer pay them for their services because the state has run out of money. Providers are told they can expect payment to resume at the start of the next fiscal year, July 1.
But few child care providers have the means to hold them over for a three month period. Child care providers are largely small businesses without access to a line of credit or rainy day fund. The average child care worker makes just over $21,000 a year. That's not far above the poverty line. Providers in low-income communities in particular depend on child care assistance to pay the rent, utilities, and salaries. Without revenue from public subsidies, child care providers will face some tough choices-all of which threaten the solvency of their businesses.
Should they continue caring for children with subsidies and risk driving their businesses into debt? Or should they tell the children in their care that they are out of luck? Providers in low-income communities are unlikely to find families who can pay out of pocket for care and so this option also puts their business in jeopardy. The move will have major effects for parents too. If working parents are unable to find a provider who accepts their child care subsidy, their livelihoods too will be threatened.
Without child care, parents can't work.
Across the country, poor communities already struggle with a scarcity of child care. In Illinois, thousands of child care providers could be forced to close their doors. Small business owners and the working poor will take one more hit, as they have throughout the recession, and ultimately young children without access to care will shoulder the burden of another state fiscal crises.