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 Director

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.

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.

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.

Families Potentially Eligible for Child Care Assistance

Parental Copayments (Fees) For a single parent at 100 percent of poverty with one child daily fees increased from $1.00 to $3.75 in For a single parent at 150 percent of poverty with one child daily fees increased from $2.00 to $7.75 in 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 For a single parent at 150 percent of poverty with two children daily fees increased from $5.00 to $9.50 in 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%)

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

West Virginia’s TANF Reserves Have Diminished Source: U.S. Department of Health and Human Services, Administration for Children & Families, TANF Financial Data

Child Care Important Part of West Virginia’s Economy

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) 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

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).