Policy Watch Investigates

Poor families facing cuts to child-care program

Photo from flickr user familymwr (https://www.flickr.com/photos/familymwr/6277787834/), (CC BY 2.0, https://creativecommons.org/licenses/by/2.0/)

Photo from flickr user familymwr, (CC BY 2.0)

Fewer working families will be eligible for child-care subsidies, if proposals in both the state House and Senate budget to change the income thresholds of participating families are adopted.

The changes could affect up to 11 percent of the families that currently receive help, with legislative fiscal staff estimating nearly 12,000 of the 110,000 children served over the course of last year would be ineligible.

The state currently accepts families with incomes that are three-quarters of the state median income, which works out to approximately $50,000 for a family of four. The new proposal would set a threshold of twice the federal poverty level, about $47,000 annual income for a family of four, for kids under the age of 5.

The more drastic change would affect those looking for child-care help for school-aged children, with a family of four having to make about $31,000 or less to qualify, or 133 percent of the federal poverty line.

Both the House and Senate budgets proposed making the changes, while Gov. Pat McCrory’s budget suggested no changes to the income thresholds.

The child-care subsidy program routinely has long wait lists that can climb statewide into the tens of thousands, and vacated spots by newly ineligible families would likely be filled by those on the wait lists.

The state estimates day care programs can cost $300 to $800 a month, depending on the county and rating of the day care program. (Click here for a chart of estimated market rates.)

The House budget proposals also include language to adjust what day care providers are paid and bring reimbursement more in line with current market rates. House and Senate members also want to see families contributed up to 10 percent of their income as a co-pay.

The stricter income provisions have gotten little attention in a hectic spring legislative session that’s seen dramatic proposals of how to adjust the $21.1 billion state budget slated to go into effect July 1. Republican House leadership unveiled a controversial plan this week to pay for 5-percent teacher raises and other education proposals like pre-K by expanding the state lottery. Meanwhile, Republican Senate leaders wanted to give teachers 11-percent raises in exchange for giving up tenure rights while slashing Medicaid coverage for an estimated 15,000 elderly, blind or disabled individuals.

Child advocates say the changes in both budget proposals to the child-care subsidy formula could be dire for affected families, many of whom seek assistance in paying high day care bills while they work or further their education.

“These are families who are working, staying off other types of public assistance and are really trying to take that next step to economic stability,” said Rob Thompson, of N.C. Child, a group that advocates for the state’s youngest residents. “You’re really just shooting these families back toward poverty.”

Children also benefit from being in child-care centers that meet state safety standards and can help them in their first few years to meet important developmental milestones, he said.

“It’s really critical to have children at that age in high-quality child-care situations where they’re being stimulated and they’re exposed to age-appropriate interactions,” Thompson said.

Sheila Hoyle, the director of the Southwestern Child Development Commission in Sylva, says income-level changes could mean turning away hundreds of families that seek help through her group, which has contracts with nine Western North Carolina counties to manage the child-care subsidy program.

The nonprofit group currently has 4,000 children from families that receive subsidies in Buncombe, Cherokee, Clay, Graham, Jackson, Haywood, Mason, McDowell and Swain counties. After seeing the legislative budget proposals this month, staff at the center looked at the caseloads for one county and estimated that a quarter of the families would no longer be eligible under the proposed guidelines.

“Child-care subsidy is the number one service that helps low-income families work,” Hoyle said. “It also helps sustain folks at are in school or who are reentering the workforce.”

Child-care subsidies help a variety of families, but the Western North Carolina nonprofit sees many single mothers or two-parent households that are trying to climb out of poverty and need help patching together the money for child care, said Cindy Moody, who manages the subsidy program for the Southwestern Child Development Commission.

Many of the families don’t want to go on other public assistance programs like food stamps or Medicaid, but see the child-care help as a way to help their family get ahead, she said.

“Without the subsidies being available, they would not be able to afford quality child care,” Moody said.

Hoyle, the director of the Western North Carolina child-care program, said some of their biggest success stories come from single mothers who use the subsidy program while working or getting degrees before eventually moving into better-paying jobs.

“A single mom who wants to work and wants to make it on her own, child care is the piece that stops her from doing that,” Hoyle said. “It truly makes a difference in some young, working families.”

Note: The original version of this story incorrectly stated that Senate and House proposals differed on proposed co-pay amounts.

Questions? Comments? Reporter Sarah Ovaska can be reached at (919) 861-1463 or sarah@ncpolicywatch.com.

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