American Public Human Services Association (APSHA) sent a letter to the White House last week, urging reconsideration of the President’s proposal to divert $400 million from the Child Care Block Grant (CCBG) to create the Early Learning Challenge Fund. Advocates believe that the President’s proposed increase of $1.6 billion should be retained fully for the support of operating the Child Care and Development Fund. Since 2002, the CCBG has had no increases in funding levels to coincide with the increases of inflation. Current economic conditions have resulted in growing child care wait lists, reduction of child care inspections, cutbacks in quality and training activities, lowered eligibility for families and higher co-payments. As states experience budget cuts in state spending, additional resources for child care are unavailable. In addition, the AARA funding used by many states to plug the holes where federal and state funding comes short will be ending September 30, 2011. Shifting $400 million from CCBG to the Early Learning Challenge Fund also shifts the ability of all states to get funding. CCBG is formula-based, so all states receive funding. However, the Early Learning Challenge Fund is competitive and only will fund a few states.
With reauthorization of the laws for the Child Care Development Fund approaching, Congress requested the Government Accountability Office (GAO) to study the trends of child care subsidy use. The study (GAO-10-344) found that from 2006 to 2008, the number of children served by CCDF declined by 10 percent. Nationally, the data reflected that 34 states experienced declines in the number of children served, while 19 states saw an increase. The overall decline in the number of children served by CCDF included state decisions about resource allocation, such as increasing provider payments, as reported in GAO survey, or decreasing TANF funds transferred to CCDF, as is reflected in expenditure data. Other factors believed to have had an impact include changes in state level requirements related to increasing income eligibility limits or extending eligibility to unemployed parents.
Based on economic forecasts, there is an indication that low paying wage earners may need more assistance through child care slots rather than less.