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State-Subsidized Childcare: A Thing of the Past?

Feb 6, 2012 Jennifer Williamson, Distance Education.org Columnist | 0 Comments

Many families living at or below the poverty level depend on childcare subsidies to make ends meet. And childcare isn’t cheap—it can cost from $3,600 to as much as $18,200 per year, depending on the age of the child, the location, and the type of care provided. But as states have been pressured to cut a range of social services, many have found the rug ripped out from under their feet. Dozens of states have dramatically cut funding for childcare subsidies to families who struggle with the cost of care—leaving these families worse off now that they need the help the most. Here’s a list of some of the states that have made dramatic cuts.

Arizona

Since 2009, the number of children served by state subsidies has been cut in half. In 2011, approximately $14 million in funding was cut—and over 3,000 teachers working in state-subsidized childcare facilities have lost their jobs. And as of this year, the state has stopped setting aside any money at all for childcare subsidies.

Utah

Child Care

Dozens of states have dramatically cut funding for childcare subsidies to families who struggle with the cost of care—leaving these families worse off now that they need the help the most.

Like Arizona, the state has stopped setting aside funds for childcare subsidies in the future. Before that, the state, which had lowered its copayment rates for childcare by 20% previously, raised them back to previous levels—a 20% increase to working families—as of October 2011.

California

As of July 2011, this state slashed the income requirements from 75% of the 2007 median income for California residents ($45,228 per year for a family of three) to 70% of that level ($42,216 per year for a family of three). This reduces the number of families who qualify for aid. In addition, the state lowered the rate of reimbursement for childcare providers who are license-exempt, although it did not do so for licensed providers.

Illinois

As of April 2011, Illinois reduced the income limit for families who qualify for subsidies from 200% of the 2010 federal poverty level ($36,624 per year for a family of three) to 185% ($33,876 per year for a family of three). It boosted the amount of copayments for families as well; the amount of the increase depends on the family’s income. In addition, as of October 2011, it reduced the maximum amount of time parents can receive childcare assistance while job-searching from 90 to 30 days.

Louisiana

This year, Louisiana’s accepted income level for families who qualify for childcare assistance went from 75% of the 2009 state median income ($37,896 per year for a family of three) to 65% of the 2011 state median income ($35,868 per year for a family of three).

Ohio

Ohio reduced qualifying income levels from 150% of the 2010 federal poverty level ($27,468 a year for a family of three) to 125% of the 2011 federal poverty level ($23,172 per year for a family of three). It also reduced reimbursement rates for both licensed and unlicensed childcare providers.

South Dakota

Midway through the year, this state reduced qualifying income from 200% of the 2011 federal poverty level  ($37,068 per year for a family of three) to 175% of the 2011 federal poverty level ($32,428 a year for a family of three).  

Maine

In Maine, the state reduced the difference between the higher rates paid to the best providers and the base rate. From now on, only the highest rate paid will be above the federally recommended levels; all other levels of pay are at or below those levels.

Missouri

In Missouri, parents will no longer be able to qualify for childcare assistance during a job search as of September 30, 2011. The only exception will be for families receiving Temporary Assistance for Needy Families.

There’s no question that many parents are unable to work if not for childcare subsidies. In some states, parents no longer qualify for subsidies at all unless they quit their jobs and go on welfare. In today’s difficult economy, it’s fairly clear that these cuts in spending are making life worse for working families—not better.

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