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Sun July 7, 2013

Kentucky Child Care Subsidy Cuts Will Cost Jobs, Options in Louisville

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Richard Morris owns a dozen child care centers around Louisville.

He expects he'll have to eventually close them all because of recently enacted cuts to a Kentucky financial assistance program for low-income families to cover child care costs.

The cuts may gradually cost more than a thousand day care workers their jobs in Louisville and force many day care centers to close, advocates warn.

"Folks who don't depend on CCAP are very likely to see the quality of their programs go down and they're likely to see the fees that are being charged go up." - Susan Vessels

“It’s going to be devastating to our business," Morris said. "Not only mine, but all the types of centers that cater to these low-income folks that provide what these kids actually need.”

Because of an $86-million dollar budget shortfall, the state changed the eligibility requirements for the Child Care Assistance Program. In the past, a family of four qualified with a monthly income of less than $2,794. Now, the same family can't make more than $1,863 per month to qualify.

Parents are likely to quit jobs or have family members or others care for their children.

That means a loss of business for child care centers.

'It's Like a Slow Death'

Morris has been in the child care business for more than 20 years.

He has about 200 employees that care for about 1,700 children. For now.

The parents qualified for CCAP before the changes but don't now won't be dropped from the program until their contracts—usually year-long—run out. Once that hits, Morris expects his business to gradually drop at all 12 day cares. Eventually, the situation will become untenable.

“It’s like a slow death," Morris said. "I hate to say it that way, but what will happen is moms and dads go back to renew these contracts and they can’t be on the program, we don’t have that family of two or three. If that happens once or twice with two or three, there goes an employee. The number of employees that we have is the amount of children that we have.”

Ripple Effect?

Even parents who don't use the CCAP subsidy may still see the effects of the cuts,  said Susan Vessels, executive director of the Louisville advocacy group Community Coordinated Child Care.

Most Louisville child care centers accept CCAP payments. Even if they don't risk closing, the child care centers will likely have to cut staff and program offerings if they lose enough business, she said.

“Folks who don’t depend on CCAP are very likely to see the quality of their programs go down and they’re likely to see the fees that are being charged go up," Vessels said. "So this is kind of a lose-lose-lose for everyone.”

The cuts will eventually cause 1,200 of Louisville's 4,000 child care workers to lose their jobs, Vessels estimates.

Statewide, 2,442 child care centers are expected to lose revenue because of the CCAP cuts, according to the Kentucky Department for Community Based Services, which administers the program and oversees child care regulation.

The state is likewise concerned that the cuts will harm the child care industry, said Theresa James, commissioner for the Department for Community Based Services.

But, she noted in a recent interview with WFPL, the cuts were unavoidable because of the department's budget shortfall.

Morris said he'll try to keep his day care open as long as it's feasible.

Child care centers don't have a large profit margin, however, and he depends on volume to keep his operating, he said.

“We’ll be trying to just fend anyway we can just trying to survive," Morris said, noting that smaller day care providers will struggle even worse. "And we’ll do that as long as we can, but when the day comes when we’re spending more money than we’re taking in, it’s very simple—you close your doors.”

(Image via Shutterstock)