State Officials, Advocates Struggle With Deficit In Child Care Subsidy Account
The largest subsidized child care program in the state is running an $8.7 million deficit just three months into the new fiscal year, and there’s concerns that the number will grow.
The $122 million Care4Kids program, which is a joint federal-state initiative, tightened its eligibility requirements this summer and closed enrollment to new families. But it’s still not enough to stop the red ink.
The nonpartisan Office of Fiscal Analysis said last week that if the Office of Early Childhood fails to manage the program there could be a $33 million shortfall in the account.
Former Office of Early Childhood Commissioner Myra Taylor Jones and Democratic Gov. Dannel P. Malloy called on Congress earlier this year to increase funding to help the state pay for the cost of the federal government’s newly mandated eligibility requirements. Those requirements, such as mandating a subsidy be given to a family for one year, increased the cost of the program. At the same time, Congress never allocated any new funding to help states pay for the mandates.
In the meantime, Linda Goodman, the acting commissioner of the Office of Early Childhood, said they will “continue to track enrollment trends and expenditure data as we explore all possible options.”
At the moment, families who are participating in the program don’t have to reapply for 12 months. Previously, the program required families to reapply after eight months so there were a lot of families going on and off the program based on increases and decreases in their income. The decision to keep families on for an entire year was supposed to create more stability for the families, but it ended up costing the state.
“This is a mess,” Helen Figueroa, director of Family Child Care Team at CSEA/SEIU 2001, said Friday.
She said the infrastructure of childcare in the state is “imploding” and it will have an impact on the business community because those low-wage workers will have to make a decision about whether to work or stay home with their child.
Most of the families receiving benefits work in the retail, fast food, and health care sector of the economy.
Figueroa said the state needs to tell the business community that they need to either “up the ante into how much you’re paying your staff so they can afford to earn a living wage, or you need to be able to afford to pay more taxes on the other end so we can afford the service families need in order to work in your company.”
Lt. Gov. Nancy Wyman, who chairs the Early Childhood Cabinet, said she doesn’t know how they are going to resolve the shortfall in the account, but they are monitoring it very closely.
She said she hopes they are able to find money elsewhere in order to keep the program going, but at this point it’s unclear what is going to happen.
She expects a decision will be made in the next few months.
Merrill Gay, executive director of the Early Childhood Alliance, said the only way the Care4Kids program can save money is to end the subsidies for families already on the program once they hit their redetermination date. Those redetermination dates are based on when a family applies for the program.
He estimated that as many as 900 families could their coverage each month. Those 900 families have more than 1,300 children. Over the next fiscal year it means 5,000 to 8,000 children could lose their childcare, which means parents will be forced to make some tough decisions that could have dire consequences.
Without reliable child care these children will be “pushed into unregulated care,” Gay said.
The consequences of leaving a child with a person who is not qualified could be deadly and “too horrible to fathom,” Gay added.
He said he hopes the state is able to find the money because he doesn’t want these families to be forced into making bad decisions.
The Malloy administration and the Office of Early Childcare have the ability to make changes to the program in order to save money, but have yet to announce any plans.
Gay said a plan to start terminating families would start with posting a 30-day notice on the CTCare4Kids website. But that has yet to happen.
“The fact remains, we take very seriously any decision to change eligibility to the program,” Goodman said Friday.