Reducing child care assistance : The Impact on West Virginia’s Low-Income Working Families

1. Reducing child care assistance: The Impact on West Virginia’s Low-Income Working Families Governor’s Child Care Assistance Meeting Friday, November 9, 2012 TED BOETTNER, Executive Director tboettner@wvpolicy.org

2. The report focuses on… • The impact of recent changes in parental copayments and income eligibility. • Relevant research on child care assistance. • The structure of the WV Child Care Program, including • Eligibility • Enrollment • Parental copayments (fees) • Reimbursement rates • Financing child care assistance • The importance of child care assistance to the state’s economy. • Policy solutions to help low-income families with child care assistance.

3. Child Care Assistance Works • Research shows that child care assistance is crucial to helping low-income families maintain employment, stay off welfare, and have higher earnings. • Several studies show a positive relationship between decreasing child care costs and women’s labor force participation.

4. Eligibility • In general, child care assistance is provided to children under the age of 13 (up to age 18 for children with developmental disabilities, physical or behavioral disorders, or under court supervision). • Parents must be employed or in school and can continue receiving child care assistance for 30 days after losing a job. • Beginning January 1, 2013, families with income between 150 and 185 percent of poverty will no longer receive child care assistance.

5. Enrollment • In 2010, 30 percent were infants and toddlers (0-2 years), 36 percent were pre-school age (3-5 years), and 34 percent were school-age (6-13 years). • 86 percent of the parents were employed, and 13 percent were receiving job training or were in school. • 74 percent of enrollees were white,12 percent multi-racial,11 percent African American, and two percent as other. • Approximately 1,400 children will no longer receive assistance beginning January 1, 2013.

6. Families Potentially Eligible for Child Care Assistance

7. Parental Copayments (Fees) • For a single parent at 100 percent of poverty with one child daily fees increased from $1.00 to $3.75 in 2012. • For a single parent at 150 percent of poverty with one child daily fees increased from $2.00 to $7.75 in 2012. Source: West Virginia Department of Health and Human Services.. Note: These calculations assume 23 days of child day care in a month. Data for 2010 could not be located

8. Parental Copayments (Fees) • For a single parent at 100 percent of poverty with two children daily fees increased from $3.00 to $6.00 in 2012. • For a single parent at 150 percent of poverty with two children daily fees increased from $5.00 to $9.50 in 2012. Source: West Virginia Department of Health and Human Services.. Note: These calculations assume 23 days of child day care in a month. Data for 2010 could not be located

9. W.Va. Copayments Below Average (6%)

10. Federal Government Pays for Almost All Child Care Assistance ($68.1 million in SFY 2011) Source: West Virginia Department of Health and Human Services

11. Child Care Assistance Spending Has Fluctuated from 2000 to 2011 Source: West Virginia Department of Health and Human Services

12. West Virginia’s TANF Reserves Have Diminished Source: U.S. Department of Health and Human Services, Administration for Children & Families, TANF Financial Data

13. Child Care Important Part of West Virginia’s Economy

14. Policy Recommendations • Appropriate additional funds to the West Virginia Child Care Program. • In 2010, nine states reported spending $82 million for child care assistance beyond their CCDF matching and MOE requirements, including: • Alaska - $285,148 • Colorado - $1,000,033 • Connecticut - $30,299,905 • Kansas - $7,871,217 • Nebraska- $29,432,451 • New Hampshire - $1,236,552 • Ohio- $7,638,059 • South Dakota - $537,567 • Vermont- $3,646,266 • In SFY 2010, Illinois spent $27.3 million on child care assistance beyond their matching and MOE requirements.

15. Policy Recommendations • Increase transparency in WV Child Care Program • Publish annual report on child care assistance statistics • Examples: Minnesota and Illinois

16. Policy Recommendations • Closely examine recent TANF spending categorized as Authorized Under Prior Law (AUPL) Source: Center on Budget and Policy Priorities analysis of U.S. DHHS Data

17. Policy Recommendations • Explore the possibility of using existing TANF funds currently allocated by the state to Administration and Systems on child care subsides. Source: Center on Budget and Policy Priorities analysis of U.S. DHHS Data

18. Policy Recommendations • Explore the creation of a refundable child care tax credit. • 28 States have Child and Dependent Care Tax benefits! • These 13 states provide a refundable credit: Arkansas, California, Colorado, Hawaii, Iowa, Louisiana, Maine, Minnesota, Nebraska, New Mexico, New York, Oregon, and Vermont. • Identify best practices in other states that could be used to strengthen the WV Child Care Program. • Join other states that invest more in child care assistance. • Establish a legal entitlement to child care assistance (Rhode Island and Illinois). • Provide child care assistance to parents searching for jobs (16 states). • Add budget language that requires WV DHHR to seek additional funding from legislature before capping any services (Vermont).