State Funding for Child Care in 2009: 30 States Saved by the Stimulus, Others Make Cuts

Because of the American Recovery and Reinvestment Act, most states are keeping public child care programs afloat near last year’s levels. But a handful of states are not providing the same level of assistance to poor families even with the federal help.

Those are a few of the messages in the 2009 report on states’ child care policies, released yesterday by the National Women’s Law Center. The center surveyed representatives of all 50 states this summer about how they would use funds from the stimulus bill, known as ARRA, which provided an additional $2 billion in funding for 2010 and 2011 through Child Care and Development Block Grants. Thirty states reported that they were using that money to maintain services, avoid or lessen waiting lists and open their services to more parents in search of work. But several others, including Arizona, Maryland, Massachusetts, Ohio and Pennsylvania, said they will be cutting funding and tightening eligibility requirements for childcare subsidies.

The center also asked states where they stood in February 2009 (exactly a year from the date of last year’s survey) on a range of policies, such as how they determine income cut-offs for assistance, the size of the co-payments they require families to make, and how they reimburse child care center and other providers who enroll qualifying children. Updates on state’s waiting lists are also included.

The report showed that states are:

• Employing more waiting lists: This year, 19 states have them – up from the 17 states with waiting lists in 2008. (The good news is that things aren’t as bad as they were in 2001, when 22 states had children on waiting lists.)
• Keeping up with inflation: This year, 35 states raised or maintained their eligibility guidelines to take inflation into account. For parents, this meant a better chance for qualifying for child care subsidies even if their salaries increased at the same rate as inflation.
• Not providing the recommended level of reimbursements for child care providers: Only 9 states are paying child care providers at the federally recommended level, which is at the 75th percentile of market rate. (For example, in Arizona, a per-child reimbursement at that level would be $780 per month, but the state only reimburses child care providers for $541 per month.) A year ago, 10 states were reimbursing at the recommended level, and in 2001, 22 were able to hit that mark.

What the report doesn’t say — and wasn’t designed to probe — is whether states are able to make any dents in the quality of their child care programs. Given the increasing numbers of families in poverty — 13.2 percent, an 11-year high — it is understandable that states are hard-pressed to keep doing what they are doing, let alone try to improve the quality of what happens in subsidized child care centers, family child care and pre-K programs. But as research this month in Child Development showed, a boost in quality could enable these providers to not only give parents a safe place to park their children while they work, but also to raise children’s academic achievement throughout elementary school. And if states are serious about vying for the proposed Early Learning Challenge Grants, which the U.S. Senate is expected to consider in the coming weeks, quality will need to be part of the picture.