State to cut child-care aid Subsidy program short $9.5 million

State to cut child-care aid
Subsidy program short $9.5 million

By KAREN LANGLEY
Monitor staff


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February 03, 2010 - 7:36 am



The state plans to reduce child-care aid for 4,760 families in a move officials say will eliminate a $9.5 million shortfall projected for the subsidy program this year.

Families will be charged a greater portion of their child-care bills starting March 1, and families with multiple children in care will pay for each child. The plan modifies a redesign of the state's child-care subsidy program, unveiled in July, that advocates described as reflecting a family's ability to pay.

More than half the families that receive subsidized care have income under the federal poverty line, and those 2,700 families pay an average of $1.78 each week for care, according to a letter the commissioner of Health and Human Services wrote last week to the Joint Legislative Fiscal Committee.

Under one plan being considered by state officials, those families would pay an average of $9.33 each week for every child in care. Another plan would increase that cost to $17 per child each week, said Maggie Bishop, the director of the Division for Children, Youth and Families. Officials are still deciding among four formulas to determine each family's share of child-care costs, Bishop said.

The department has not decided how long the change will last, but it will use the cuts to eliminate any deficit for the biennium, Bishop said.

Child-care providers and advocates warn that reducing subsidies will lead parents to a difficult choice: quitting jobs so they can watch their children or patching together an unregulated network of care from friends and family. Either option could lead to an increased need for social services later on, they say. When struggling parents hesitate to pull their child from care, centers must decide if they can reduce a family's fee, said Bobbie Gaudette, executive director of the White Birch Community Center, a nonprofit child-care center in Henniker.

The Bureau of Child Development has spent the past four months trying new ways to stay on budget after a year when unprecedented numbers of families have sought child-care assistance. The deficit projected for the child-care program this year has nearly doubled since July, despite a multi-pronged effort to cut costs. The department in October stopped accepting all but a few applicants for subsidies, and last month it halted cash awards for child-care centers that meet standards above basic licensing.

The number of children receiving aid grew 15 percent between February 2008 and August 2009, shortly before the department stopped accepting applications from families that do not receive cash welfare assistance, host foster children or are considered at risk by the state. While total enrollment has risen, the state has seen disproportionate increases in the most expensive types of care.

In his letter to legislators, Commissioner Nicholas Toumpas cited an increased number of infants, as well as longer average stays in the child-care system, as reasons the program's projected shortfall has grown to $9.5 million for this year, up from an estimate of $5 million in July. Children younger than 18 months accounted for nearly 25 percent of aid recipients in August, up from 10 percent 18 months earlier. The state calculates the cost of part-time care for an infant at nearly twice the cost of care for a school-age child.

When the department began wait-listing aid applicants in October, officials predicted the list would grow to 1,100 children by July. But applications continued to pour in more quickly than expected - about two children per business hour - and in late December officials said the list could include 3,000 children by the fiscal year's end. Still, the cut had not been enough to eliminate a deficit then projected at $6 million.

Department officials have met with child-care providers since early January to decide what cuts would fill the gap. One participant, the director of a nonprofit serving child-care providers and clients, said the group worked until members agreed their plan would cause the least possible harm.

"At the same time, that adjective still worked," said Jackie Cowell, executive director of Early Learning New Hampshire. "Even though there was the least 'harm,' it remained harmful."

Hooksett resident Jessica Hoag has already felt the impact of increased demand on the child-care program. When Hoag was a few days late submitting the renewal forms for her 6-year-old son's child-care subsidy in November, they lost their aid, she said. She and her son's father were no longer able to afford the full-time care Bruce received after kindergarten, and so Hoag had to stay home to watch him.

Bruce began behaving badly without the activities and socialization of child care, and Hoag lost so many business clients while running errands that she no longer works, even after Bruce qualified for part-time aid and returned to child care in January, she said.

"It kind of defeats the purpose," Hoag said. "We're supposed to get the help so we can work and be independent."

With their family now living on the money her son's father earns driving a taxi, Hoag said she will wait and see whether the cost change pushes child care out of reach.

"It depends how much more," she said. "There's a very fine line between what we can afford and what we can't."

Gaudette, of White Birch Community Center, said the impending cuts to state aid will not necessarily mean most subsidized families pay more for child care.

"I would venture to guess White Birch will probably excuse some of that co-pay," she said. "It puts White Birch in a fiscal position where we're subsidizing the child care again."

The center is already expecting a $22,000 cut in state revenue for 2010, and employees have not received raises since 2007, Gaudette said. She said the cuts in awards for centers and subsidies for parents will force some programs to close.

Decreased subsidies have prevented Above and Beyond Childcare in Hooksett from increasing its fees for several years, making it increasingly difficult to pay rising costs, said owner Rebecca Collins.

"It's hard to hit the parents twice," she said.

The Division for Children, Youth and Families plans to notify families and providers of the planned changes in the next few days.


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