Attention to State Child Care Subsidy Systems Essential to Building the Supply of High-Quality Child Care and Supporting Families with Infants and Toddlers

This post originally appeared on the BUILD Initiative’s website. 

Helen Blank, Director of Child Care and Early Learning

Advocates striving to ensure that all families—especially low-income families—have access to high-quality child care for their infants and toddlers should focus on strengthening their state’s core child care assistance system. It is a key determinant of both the quality of care that low-income children receive and their families’ economic stability. States now have a tremendous opportunity to improve their child care assistance policies and make them work better for infants and toddlers and their families, thanks to the historic increase in funding for the federal Child Care and Development Block Grant (CCDBG) starting in FY 2018.
By reducing families’ financial burdens and enabling families to gain access to stable, nurturing care, child care assistance promotes children’s well-being. With assistance, parents can afford the reliable child care they need to get and keep a job or get the education they need to obtain a better job, which in turn, enables them to earn the income necessary to support their family. A study found that single mothers of young children who received help paying for child care were 39 percent more likely to still be employed after two years than single mothers of young children who did not receive any help paying for child care. Parents who have a stable job and a stable income, and whose child care costs are fully or partially subsidized, often have less stress, which makes it more like they will have the positive interactions with their children that are so crucial for their healthy development.
Step One: Generous Eligibility 
The first step in building a strong state child care assistance system that supports children and families is establishing generous eligibility criteria. States should set high enough entrance income limits to allow families who need help to qualify for assistance, and high enough exit eligibility limits to allow families to continue receiving it until they have gained financial stability. Currently, many states set their entrance eligibility limits far too low. In 2017, a family with an income above 150 percent of poverty ($30,630 a year for a family of three) could not qualify for assistance in 15 states.
In addition to generous exit eligibility limits, states can also help families retain child care assistance over a sustained period—allowing for the continuity of care that is essential for very young children’s development—by having a lengthy eligibility period during which families can continue to receive assistance without having to recertify. The CCDBG reauthorization law enacted in 2014 requires states to allow families to remain eligible for child care assistance for a full 12 months, unless their income exceeds the federal maximum limit or, at state option, they permanently stop working or attending school. As of June 2017, 41 states had a 12-month eligibility period for all families, and several additional states are moving toward compliance with this requirement.
Step Two:  Serve Qualifying Families
Next, states should ensure families who qualify for child care assistance under the eligibility criteria can actually receive help. As of February 2017, 21 states either placed eligible families who applied for child care assistance on waiting lists or froze intake—turning away eligible families who applied for help without even taking their names. California, Louisiana, North Carolina, and Texas are among the states that are using the new CCDBG funds to serve families on their waiting lists.
Step Three:  Fair Rates 
Another critical component of state child care assistance systems are the payment rates paid to providers that serve families receiving child care assistance. Low payment rates can discourage providers from enrolling children receiving child care assistance because the payment rate is not high enough to cover the costs of the care they provide. Those providers who do enroll children receiving child care assistance struggle to cover the costs entailed in offering high-quality care—and the bulk of the costs are salaries. Low rates make it difficult to pay sufficient compensation to attract and retain well-qualified child care teachers, who are central to determining the quality of children’s experiences in child care. Children are also negatively affected when their teachers are constantly worried about supporting their own families with their meager wages. This stress can interfere with the bonding and relationship-building between children and teachers that is so critical for social and emotional development in children, particularly infants and toddlers.
In 2017, only four states (Arkansas, South Carolina, South Dakota and West Virginia) had payment rates for center care for a one-year-old that were at or above the federally recommended level (the 75thpercentile of current market rates for the given category of care, which is the rate designed to allow families access to 75 percent of the providers in their community). Only seven states (Arkansas, California, Connecticut, New York, South Carolina, South Dakota, and West Virginia) had payment rates for family child care for a one-year-old that were at or above the federally recommended level.
A number of states are using the new CCDBG funding to raise payment rates, with some states focused specifically on care for infants and toddlers. Maine increased payment rates for all licensed child care and all age groups to the federally recommended level. Wisconsin increased its payment rates by five percent for care for children under age four. Vermont will use the majority of its new funds to  increase payment rates for providers serving infants and toddlers. The increase is estimated to bring its rates just below the 2015 market-rate level. Iowa will increase payment rates for providers  caring for infants and toddlers and participating in the state’s Quality Rating and Improvement System to the 75thpercentile of 2014 market rates, and will provide gradual increases for providers currently receiving very low payment rates (below the 50th percentile of market rates).
Step Four: Payment Practices
Providers’ income, their ability to stay in business, and their willingness to serve families receiving child care assistance depend not only on state payment rates but state payment practices as well. The CCDBG reauthorization law requires states to adopt payment practices for subsidized providers that mirror practices providers use for parents paying on their own. For example, states are now expected to pay for days when the children of families who receive assistance are absent from care, just as parents paying themselves are typically required to pay to hold a slot for a full week or full month, even if their child is absent some of those days. Providers need that income for fixed costs—staff, rent, and utilities—that they must cover whether or not children are in attendance on any given day. Payment for absent days is particularly important for providers caring for infants, who are likely to have frequent illnesses as their immune systems develop, and therefore likely to have frequent absences. Since the enactment of the CCDBG reauthorization, several states have increased the number of absent days for which they will pay child care providers. For example, Nevada, which previously had paid for only 21 absent days per year, has begun paying based on the child’s approved schedule of care, rather than the child’s actual attendance.
Step Five:  Practical Strategies for Non-Traditional Hours of Service
State child care assistance programs should also support a wide variety of child care providers to meet the full spectrum of families’ needs. For example, many families need care during nontraditional hours, including evenings, nights, early mornings, and weekends. One in five working mothers of very young children works in a low-wage job, often characterized by unstable, unpredictable, nontraditional-hour schedules. Most licensed or regulated child care centers and family child care homes cannot accommodate parents with fluctuating or nontraditional work schedules. States can support child care providers—licensed and license-exempt—that are willing to care for children during these hours through training, technical assistance, networks, and other strategies. The Skip-A-Long Home Child Care Network in Illinois offers a local model for supporting providers that offer nontraditional-hour care. The network includes 57 licensed family child care homes, most of which are open 18 hours a day, seven days a week. States can also support family, friend, and neighbor (FFN) providers—who are more likely than licensed providers to offer nontraditional-hour care—by allowing and facilitating their participation in the state’s subsidy system and by funding organizations that work to improve the quality of FFN care. New York funds organizations that help FFN providers enroll in the subsidy system and that offer FFN providers health and safety training and other supports.
It All Adds Up to Quality for Infants, Toddlers, and Their Families 
These various child care assistance policies work in combination to determine low-income families’ access to high-quality infant/toddler care. It can be impossible to sustain a high-quality child care program in a low-income neighborhood if—as a result of a state’s low-income eligibility limit or long waiting list—few families can receive child care assistance, and if—as a result of a state’s low payment rates—it is not economically viable for the provider to serve those families who do manage to receive assistance. A child care program in a low-income neighborhood cannot expect families to afford the program’s fee entirely on their own or to make up the difference between the state’s low rate and the rate needed to cover the program’s costs. Ensuring that low-income families have high-quality options for infant/toddler care will require states to improve multiple aspects of their child care assistance policies simultaneously.
Let’s Close the Gaps: Don’t Forget Your State and Federal Elected Officials
Continued and expanded federal and state investments are critical to sustaining and building on the progress states have started to make in strengthening their child care assistance policies. Advocates need to let their senators and representatives know how the historic increase in federal CCDBG funding is making a difference in their states and make the case for both maintaining and increasing the funding. Advocates should ask their state legislators to increase state investments in child care as well. With continuing gaps in access to high-quality child care for infants and toddlers, and a greater understanding of and focus on the importance of child care among policymakers and the general public than ever before, now is the time to call for action.