The state won’t increase the number of Kentucky children who are eligible for a child care subsidy until late summer, adding to fears for the financial viability of some day care owners.
Some child care providers expected the increase to start July 1, but state officials plan for the Child Care Assistance Program increases to begin no sooner than August. The added weeks may prove costly to the state’s child care businesses, child advocates say.
Brenda Bowman, chief operating officer for Southside Christian Child Care, said her chain of 18 centers has suffered a 30-percent cut in labor over the past year.
The cuts to the subsidy program have made child care unaffordable for thousands of families—and the loss of business has taken a toll on child care centers, Bowman said.
“The bottom line is our infrastructure in early childhood education has fallen and if they wait too long there’s not going to be one left,” Bowman said. “I know I sound dramatic, but it is that serious.”
The Child Care Assistance Program gives subsidies to low-income working parents to cover the cost of child care. Because of a budget shortfall, the state froze the program and lowered the maximum income for eligibility. The full cuts went into effect in July 2013, and in May the program had half as many children enrolled as the year before, according to the state agency that administers it.
In the past year, Kentucky child activists said the CCAP cuts have led working parents to quit jobs or to leave their children with family members or “underground,” off-the-books child care providers.
This spring, the General Assembly approved additional funds for CCAP. The intent was to gradually restore funding to the program to its pre-cut levels starting in July 2015. But Bowman said she and other child care providers assumed that more children would be let into the program starting in July, when the state’s new fiscal year begins.
The Southside Christian Child Care chain budgeted around that assumption—hiring additional staff and factoring out shifted funds from its centers outside the state.
“We were getting those things in place and now we’re stuck with having employees but the children aren’t coming back,” she said.
Bowman, who has worked with the Louisville group Kentucky Youth Advocates to lobby for the program, said smaller child care operations have had to file bankruptcy or close.
To date, Kentucky has 180 fewer child care centers than a year before, according to data provided by the Cabinet for Health and Family Services, which administers CCAP.
The CCAP cut may not be responsible for every shuttered day care in the past year. A cabinet spokeswoman said the agency does not track why child care centers close.
Since last year’s cuts, only families that earned 100 percent or less of the federal poverty level were eligible to remain in CCAP—$1,863 per month for a family of four. The cabinet expects to increase the limit to 125 percent of the poverty level, or $2,328 per month for the same family.
In July 2015, the limit would raise to the pre-cut monthly income of $2,794.
Cabinet officials were investigating whether the level could be increased beyond the 125 percent level this year—but lower than expected state revenues may spike those efforts, said Beth Jurek, the cabinet’s executive director for policy and budget.
“We were going to try to get as close to 150(percent) as we could,” Jurek told state lawmakers during a committee meeting earlier this week.
State agencies have been asked to find ways to reduce discretionary spending, Jurek said. The condition of the state’s general funds at the end of the current fiscal year will factor into whether CCAP can be increased beyond 125 percent level.
Jurek added, “We’re pretty confident that between Aug. 1 and Sept. 1 we will be able to go to at least 125, if we’re lucky, we might be able to push that and go a little further.”
She told legislators that the cabinet expected to have made decisions about the future of CCAP by now, but faced “some complicating, intervening factors,” such as the state revenue shortfall.
Bowman said the cabinet could help providers by unfreezing CCAP to new applicants in July and increasing the eligibility maximum later in the year. The move would add new children sooner—and help centers’ bottom lines, she said.
Either way, Terry Brooks, executive director of Kentucky Youth Advocates, said the state has a “pragmatic and ethical obligation” to share details of the plan for increasing CCAP eligibility—on how to apply and when the new funds will kick in, for example.
“Every day and week that passes after July 1 in implementing these supports will pull the rug out from many Kentuckians,” Brooks said in a statement.
“Many child care centers will be unable to sustain operations. Parents will be in that no win position in which the price of child care actually costs the family checkbook more than not working. And local economies will continue to lose.”