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 Directortboettner@wvpolicy.org

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.

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.

WV PA LA M

SM

A AR OH MT AZ NY

ME TX RI

MO HI

FLDE KS NV NE UT ID SD

WY AK

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

West Virginia's Labor Force Participation Rate for Single Mothers is the Lowest in the Nation (2011)

Source: U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics

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.

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0%

50%

100%

150%

200%

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300%West Virginia's Income Eligibility Limits Among the Lowest in 2012

Source: National Women’s Law Center

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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.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

14,159

21,024

15,432 14,736 14,457 13,823 13,411 13,599 14,050 13,819 13,449

Enrollment in W.Va. Child Care Assistance Declining(Average number of children served per month)

Source: West Virginia Department of Health and Human Services

Families Potentially Eligible for Child Care Assistance

Children (Ages 0-12) at or Below 150% FPL Children (Ages 0-12) at or Below 150% FPL with at Least One Parent Working

Children (Ages 0-12) at or Below 150% FPL with Both Parents Working or the Only Parent Working

(if living with only one parent)

102,497

73,219

46,760

Source: Center on Law and Social Policy analysis of 2008-2010 ACS data

Parental Copayments (Fees)

50% FPL 100% FPL 150% FPL 185% FPL0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

8.2%9.1% 9.4% 9.6%

Copayments for Single Parent with One Child

2007

2008

2009

2011

2012 (old)

2012 (new)

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• 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

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.

50% FPL 100% FPL 150% FPL 185% FPL0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

8.7% 8.7%9.2%

9.8%

Copayments for a Single Parent with Two Children

2007

2008

2009

2011

2012 (old)

2012 (new)

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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

W.Va. Copayments Below Average (6%)

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Parental Copayments for Family of Three With An Income at 100 Percent of Poverty and One Child in Care

Source: National Women’s Law Center and WVCBP analysis of WV DHHR data

Federal Government Pays for Almost All Child Care Assistance ($68.1 million in SFY 2011)

Federal ARRA ($5.4 million)8%

Federal TANF ($29.4 million)

43%

Federal CCDF ($26.9 million)

40%

WV CCDF Match ($3.2 million)

5%

WV TANF/CCDF MOE ($2.9 million)

4%

Source: West Virginia Department of Health and Human Services

Child Care Assistance Spending Has Fluctuated from 2000 to 2011

Source: West Virginia Department of Health and Human Services

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

Federal CCDF Federal TANF WV General Revenue Fund

State Fiscal Year

West Virginia’s TANF Reserves Have Diminished

Source: U.S. Department of Health and Human Services, Administration for Children & Families, TANF Financial Data

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

Total TANF Funds Used Unobligated Balance

Federal Fiscal Year

Child Care Important Part of West Virginia’s Economy

Child Care Workers in Child Care Centers

Total Child Care Workers

2,770

5,947

Source: Workforce WV

Median Wage of Child Care Workers

State Median Wage

$8.62

$13.46

Source: Workforce WV

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.

Policy Recommendations• Increase transparency in WV Child Care Program

• Publish annual report on child care assistance statistics• Examples: Minnesota and Illinois

Policy Recommendations• Closely examine recent TANF spending categorized as

Authorized Under Prior Law (AUPL)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$30.0

$26.3

$19.0

West Virginia TANF Expenditures under AUPL

Federal Fiscal Year

Source: Center on Budget and Policy Priorities analysis of U.S. DHHS Data

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

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.00%

5.00%

10.00%

15.00%

20.00%

25.00%

16.53%

8.44%

Share of W.Va. and U.S. TANF Spending on Administration & Systems

West Virginia United States Total W.Va. Average U.S. Average

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).