Child Care Update

August 13, 2009

Author: Susan C. Antos

The Budget

This year, the New York State budget allocated $736,036,409 to local social services districts for the provision of child care assistance for the period of April 1, 2009 through March 31, 2010.  Governor Paterson had proposed to take $356 million of this amount and put it in the Flexible Fund for Family Services, and allow districts the choice as to whether to use this funding for child care or other activities. 

Child care advocates spent much of the session trying to defeat this proposal, and were successful. The final county by county allocations for 2009-10 appear in 09 OCFS-LCM-5 http://www.ocfs.state.ny.us/main/childcare/plans/plans.asp).  As they did last year, OCFS adjusted the allocations to reduce funding to those counties that did not spend most of their allocations from the previous year.  For State Fiscal Year 2008-09 the adjustment was made to any county that rolled over more than 10% of its funding in a previous year.  This year counties were not penalized unless they rolled over more 15% of their previous year’s funding.

This year’s Child Care Block grant allocations will be supplemented by stimulus funding provided under the American Recovery and Reinvestment Act (ARRA).  New York State has been allocated $97 million in federal stimulus funds to spend on child care.  The Office of Children and Family Services plans to distribute $42 million of this ARRA money to local social services districts for child care subsidies for the period of October 1, 2008 – September 30, 2009.  OCFS has limited the distribution of this money to districts that spent at least 85% of their Child Care Block grant funding in federal fiscal year FFY 2007-2008.  Thirty social services districts will not be getting ARRA money because they had unspent funds from FFY 2007-08 exceeding 15% of the block grant and rolled that amount forward into FFY 2008-2009.  These districts are identified in 09 OCFS-LCM-5.

The decision of the Office of Children and Family Services reduce block grant funding and keep stimulus money from those districts that did not spend the bulk of their child care allocations is sound. Child care is simply too important a benefit to sit in local coffers, unspent. Local districts should analyze their current spending and make efforts to assure that they are not sitting on significant unspent money looking forward, or it is likely that they will lose out in next year’s allocations and on the second round of stimulus funding, which should be slightly larger than the $42 million which OCFS will distribute shortly. Districts that are receiving stimulus money should be sure that they spend it.

So what is a district to do?  Here are a number of ways that districts can spend their child care money:

Lower Parental Co-Payments:

Over two-thirds of the thirty districts that did not receive stimulus funding because their roll-over was more than 15% have extremely high parental co-payments. State regulations provide a formula to determine parental copayments which requires local districts to subtract the poverty level from parental income and then multiply the resulting number by the district’s choice of a percentage – from 10 -35%.  Thirteen of the districts that did not receive stimulus funding utilize a 35% multiplier[1] and ten utilize a 25% multiplier.[2]  High multipliers mean that the parent fee is high and the county subsidy is lower than it needs to be. In many cases, high co-payments are a barrier to parental participation because the high co-payment is more than the parent can afford. The effect of using of such high multipliers is illustrated below for a family of three at 200% of poverty:

• In a 35% multiplier county, the parent co-pay is $123 per week or $6408 per year.
• In a 25% multiplier county, the parent co-pay is $88 per week or $4577 per year.

Contrast with a low multiplier county:

• In a 15% multiplier county, the parent co-pay is $52 per week or $2746 per year.
• In a 10% multiplier county, the parent co-pay is  $35 per week or $1831 per year.

Maximize Eligibility:

New York Social Services Law § 410-w(1)(b)-(e) makes it clear that families up to 200% of poverty are eligible for child care assistance. OCFS permits local districts to lower eligibility levels below 200% of poverty if they do not have sufficient funding to cover all parents who are eligible. Curiously, two-thirds of the counties who are not receiving stimulus funding have in the last year lowered their eligibility levels below 200% of poverty, some as low as the poverty level.  To make sure that these counties do not lose out on the second round of stimulus money, these counties should immediately raise their eligibility levels and spend the money that they have not spent by providing child care for parents who need it.

Other Ways for Counties to Spend Subsidy Dollars:

Local districts can expand the range of activities  for which child care can be provided. A review of a local district’s biennial plan or amended plan update (available on line at: http://www.ocfs.state.ny.us/main/childcare/plans.asp) reveals a list of the many ways that a district can use subsidy funds. A district must affirmatively   indicate in the plan if it has chosen to provide the following:

• Child care while a parent is pursuing post secondary education or while a parent is looking for work. Many counties choose not to provide subsidies for parents in these situations, or if they do they limit eligibility more narrowly than the statute permits.
• Deposits for parents whose providers require them as a condition of enrollment;
• An enhanced market rate for parents whose children are enrolled with accredited providers;
• An enhanced market rate for parents whose children need care during non-traditional hours;
• Child care for parents with night jobs who need to sleep during the day while their young children are awake.
• Transportation costs for travel to and from child care.

This year’s child care allocations of child care money reveal that OCFS is going to reward counties that are more aggressive than others in serving low income families who need child care to work, look for work or go to school.  Advocates in counties that have lost out on stimulus funding should work closely with their local officials to establish spending policies that make sure that funds  reach the parents that need child care. Advocates in counties that have received stimulus funds should be vigilant to see that that their districts spend the stimulus money to ensure their continued receipt of such funds.

Footnotes      

1  These thirteen districts are Chenango, Cortland, Erie,  Franklin, Genesee, Greene, Montgomery, Niagara, Orleans, Oswego, Seneca, Sullivan and Wyoming.
2  These ten districts are Delaware, Hamilton, Herkimer, Lewis, Madison, Oneida, Rensselaer, St. Lawrence, Schuyler, and Ulster.