Early Childhood

New Report Lists How States Plan to Use Increased Federal Funding for Child Care

By Marva Hinton — February 08, 2019 2 min read
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This year more than half of the states plan to use part of the record increase in federal Child Care and Development Block Grant funding to raise payment rates for child-care providers. That’s one of the key findings in a new report by the National Women’s Law Center.

The report runs down how each state and the District of Columbia plans to spend these federal dollars. Last year, Congress approved a nearly $2.4 billion increase in funding for the federal child-care program. Those funds go to states to help low-income families afford child care, and the need is great. The report indicates that only one in six children eligible for this assistance receives it.

The report says that raising payment rates to providers “encourages more providers to serve these families and gives providers more of the resources they need to support high-quality care and adequate salaries for child care teachers and staff.”

“It’s already starting to make a difference for the families and children who rely on help paying for care,” said Karen Schulman, the report’s lead author and the child care and early learning director at the National Women’s Law Center. “Many families who couldn’t get help before now can get help.”

The National Women’s Law Center used information that was provided and verified by state child-care advocates and state child-care administrators to compile this report.

It found that eight states plan to use the funds to serve families on waiting lists for child-care assistance. For example, Texas plans to serve about 28,000 children who were on the state’s waiting list, while North Carolina plans to remove about 3,700 children from its waiting list. (The NWLC reported last year that both states had more than 20,000 children on their waiting lists.)

“Families are waiting with that uncertainty,” said Schulman. “Parents might not be able to search for work or get work without child care.”

States Playing Catch-Up

While Congress’ CCDBG funding increase last year was the largest in history, it doesn’t mean that states are now flush with cash for child care.

The federally recommended level of compensation for providers is 75 percent of current market rates, and as of this month only Maine meets that guideline. Among the states that plan to increase the payment rates of providers, many aren’t coming close to that standard.

Take Arizona for instance. It plans to raise its provider rates from the 75th percentile of the 2000 market rates to the 50th percentile of the 2010 market rates, and Idaho plans to go from the 65th percentile of 2015 market rates to the 65th percentile of 2018 rates.

“States were really behind, so it’s sort of just making up for that gap,” said Schulman. “We need a lot more investment to really make a dent in all of those families who need help paying for care.”

Several states also plan to use the funds to carry out the requirements of the CCDBG Act of 2014, which was designed to improve the quality of care. It calls for such things as criminal background checks for providers and the graduated phase-out of child-care assistance rather than a family losing its subsidy suddenly due to a change in circumstances.

A few states have not decided how to spend these funds. They have until Sept. 30 of this year to decide and until September 30, 2020 to spend the money.

Image by Getty

A version of this news article first appeared in the Early Years blog.