July 11, 2014

State budget could cost thousands child-care subsidies

Hundreds of Charlotte children – and thousands across the state – could lose their after-school care when the state budget is approved.

Hundreds of Charlotte children – and thousands across the state – could lose their after-school care when the state budget is approved.

In an attempt to give higher priority to North Carolina’s youngest and poorest children, both the House and the Senate budgets include changes to how the state determines eligibility for child care subsidies. But while the proposed system would open up space for disadvantaged children under the age of 5, it would remove funding for nearly 12,000 school-age children – leaving many families in a difficult position.

The amount of money in the subsidy program wouldn’t change, but the proposal would tighten the qualifications for school-age children to get assistance. That would make room for more subsidies for younger children.

But in making the change, nearly 25 percent of 6- to 12-year-olds who receive subsidies for after-school care in Mecklenburg County would lose their funding, according to Child Care Resources Inc., a nonprofit that manages child care subsidies for the county. The change would not only impact parents and children, but child care providers and the community as a whole, said CCRI President Janet Singerman.

“Parents are concerned, providers are concerned, we are concerned,” Singerman said.

Currently, all children under 13 are eligible for a subsidy if their parents earn less than 75 percent of the state median income, or $50,244 for a family of four.

The proposed system would instead be tied to the federal poverty level:

• Children under 6 would be eligible if their parents earn less than twice the poverty level, or $47,400 for a family of four.
• The requirement would be tougher for school-age children. Those ages 6 to 12 would be eligible only if their parents earn less than 133 percent of the poverty level, or $31,270 for a family of four.

In Mecklenburg, that system would take away subsidies for almost 700 of the 2,500-plus school-age children who currently receive one, according to CCRI data.

The proposed system would not change the total amount of money that goes toward child care subsidies, according to the legislature’s fiscal research division. The majority of North Carolina’s funding – 80 percent – comes from the federal government, and the proposed eligibility system would keep overall funding at $348 million.

But by placing the threshold for eligibility lower while keeping funding the same, the proposed system is designed to help the youngest and poorest children. Demand for subsidies currently outpaces funding, and so children are placed on a waiting list until funding becomes available.

Statewide, the system should cut the waiting list by 3,200 families, according to the Senate.

The proposed budget also includes a change to the co-pay that families would need to contribute to receive a subsidy. Currently, co-pay rates range from 8 to 10 percent of a family’s monthly income, depending on the family’s size. Under the proposed system, the co-pay would universally be set at 10 percent – a notable difference for some larger families who earn less.

For many families who stand to lose their subsidies, securing child care will not be easy. The cost of part-time care for school-age children averages $446 per month in Mecklenburg, according to CCRI research, and for many families – particularly those with multiple children – this cost can be prohibitive.

“We’re concerned, clearly, about the impact this will have on families,” Singerman said.

The subsidy program is designed for parents who are employed, seeking employment or in school, and 86 percent of Mecklenburg children who receive a subsidy have working parents, according to CCRI data.

For these employed parents who cannot easily afford quality child care on their own, losing a subsidy presents difficult decisions regarding their work schedule, said Anna Carter, president of the nonprofit Child Care Services Association.

“If they’re not in an after-school program, where are they going to be?” Carter said. “Is an 8-year-old child going to be left alone?”

Sen. Jeff Tarte, a Republican from Cornelius, said the goal of the proposed system is to shift the focus to early childhood development, citing research showing that children who receive high-quality care in their younger years have more academic success later in life.

But the importance of child care for school-age children cannot be overlooked, Singerman said. After-school care provides more for children than just supervision. Programs place students in a safe environment where they receive academic enrichment, socialization and nutritious snacks every day. Without after-school care, “all of that is left as a big question mark,” she said.

“I know that we don’t have a lot of money in our system, but this (proposal) is not a good thing,” said Jane Meyer, executive director of Mecklenburg County’s Smart Start program, which provides early childhood education services. “It would be a drastic change.”

The impact of the proposed system goes beyond the children’s well-being, Singerman said. Without an affordable option for child care, parents could be forced to cut back on their working hours or find themselves losing their jobs altogether. And if fewer children are enrolled in child care programs, the care providers could see a financial impact as well.

“It affects the child, the parent, the child care provider, the economy,” Meyer said.

Katy Canada of The (Raleigh) News & Observer contributed.

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