Report Finds Limited Resources Force States to Make Tough Trade-Offs in Child Care Policy, Resulting in Great Unmet Need

3/13/2002

From: John Hutchins of the Center for Law and Social Policy, 202-906-8013, jhutchins@clasp.org

WASHINGTON, March 13 -- Despite significant increases in child care funding and the number of children served since 1996, much unmet need remains for child care assistance and early learning opportunities. At the same time, deteriorating economic conditions and budget crises in many states are jeopardizing recent child care gains, according to a new study, "Unfinished Agenda: Child Care for Low-Income Families Since 1996 -- Implications for Federal and State Policy," released today by the Center for Law and Social Policy (CLASP).

"Federal resources and leadership will be necessary if states are going to meet the twin challenges of protecting the child care improvements they have made over the last five years and of building on these accomplishments to increase access to care and improve the quality of that care," said Jennifer Mezey, staff attorney at CLASP and lead author of the report.

The study comes at a critical time as Congress must reauthorize the two major federal sources for child care assistance for low-income families this year: the Child Care and Development Fund (CCDF) and the Temporary Assistance for Needy Families (TANF) block grants. President Bush's recent welfare reform proposal -- which would require more welfare recipients to work longer hours but adds no new money for child care -- would only exacerbate an already troubled child care situation.

The new report synthesizes findings from reports on the child care systems of five states -- Illinois, Iowa, Maine, Texas, and Washington state -- and puts them into context using national child care data and research. It concludes with recommendations urging federal policymakers to increase child care funding in order to enable states to increase access to and improve the quality of child care, adopt policies that will increase families' access to a broad array of care, and improve data collection and reporting requirements.

Among the study's findings:

Child care funding has increased significantly as has the number of children served - but so has demand for child care. Between 1997 and 2000, total child care funding doubled, driven mostly by federal CCDF and TANF dollars. In fact, in 2000, TANF became a larger source of federal child care funding than CCDF. In part, states used these funds to serve 800,000 more children in 1999 than were served in 1996 and invest in quality improvements. At the same time, however, the demand for child care subsidies also increased dramatically, in part due to historic increases of low-income mothers in the workforce and of families who have moved from welfare to work, as well as stricter work participation requirements for welfare recipients.

Despite these investments, most families who are eligible for child care subsidies don't receive them. Child care demand far outstrips supply. The data in this report confirms previous findings that the vast majority of children who are eligible for assistance under federal CCDF eligibility standards do not receive CCDF-funded child care assistance.

States forced to make painful policy trade-offs. With demand for child care subsidies outstripping resources, states have had to make difficult policy trade-offs that have had the effect of limiting families' access to subsidies and to an array of child care providers. Funding constraints have resulted in long waits for child care assistance, limited outreach, prioritization of the lowest-earning families, high copayments that burden families, and payments to providers that are well below the market rate for child care services.

State budget shortfalls jeopardize states' ability to maintain access to and improve the quality of child care, which is so important to children's early education. Increased funding and a quality "set-aside" requirement in the CCDF program have allowed states to invest in initiatives designed to improve the quality of child care services and create early learning opportunities. These efforts are supported by a growing body of research demonstrating that there are key components of early learning environments that are linked to better early childhood development outcomes and later school performance. However, many of these quality initiatives are fragile and small, reaching a small portion of the children and providers who could benefit from them. These initiatives will need sustained support to survive, particularly when budget shortfalls threaten these investments.

The new CLASP report was released in conjunction with five separate reports on child care policy in Illinois, Iowa, Maine, Texas, and Washington state developed by the following organizations in collaboration with CLASP:

-- Day Care Action Council of Illinois,

-- Child and Family Policy Center of Iowa,

-- Child Care Services of York County (Maine) (which partnered with University of Southern Maine Child Care and the People's Regional Opportunity Project),

-- Center for Public Policy Priorities (Texas), and

-- Washington State Child Care Resource and Referral Network.

To obtain embargoed copies of the full report, a policy brief, and the five state reports or to set up an interview with one of the authors of Unfinished Agenda or the state reports, contact John Hutchins, Communications Director, (202) 906-8013. For more information about CLASP, visit http://www.clasp.org.