Eligibility cuts to childcare subsidies penny wise, pound foolish

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Parents, childcare providers, and legislators gathered in Hartford on December 7 to discuss the crucial role childcare plays in supporting Connecticut’s economy. The forum was held in response to recent news that the Care4Kids childcare subsidy program, which helps low-income families pay for childcare, will be closed to almost all new applicants. The message of the forum was clear: childcare is a critical component of the state’s economic infrastructure. Removing access to childcare for thousands of Connecticut families will cost the state more money than it will save.

Further restrictions to the state’s childcare subsidy program come at the same time as a new report from Childcare Aware of America demonstrates the immense cost burden that childcare places on low- and middle-income families. In Connecticut, parents with one infant will spend $14,079 per year on center-based care. In a family with two children, this number can reach upwards of $25,000 per year. That is more than 2.5 times the cost of public tuition at a four-year college. The implications are clear: low-income working parents cannot afford to pay for childcare without assistance.

That assistance comes from Care4Kids, Connecticut’s subsidy program, which provides financial help to low-income families to pay for childcare. The program is funded by a combination of federal and state dollars. However, recent unfunded mandates at the federal level have made the program more expensive to administer, resulting in a multi-million dollar funding deficiency. To mitigate the deficiency, the program’s eligibility rules have changed, closing the program to all new applicants except those receiving Temporary Assistance for Needy Families cash benefits.

Now, many Connecticut parents are facing a series of devastating questions. Can I afford to pay for childcare and stay in the workforce? Should I quit my job and stay home to take care of my children? Am I forced to place my children in unlicensed care to keep my job?

At All Our Kin, we work with over 400 licensed family childcare providers —primarily women who run childcare businesses in home-based settings, and who rely heavily on income from Care4Kids to sustain their programs. We are already seeing the effects of eligibility cuts to the Care4Kids subsidy program in our work. The negative impact is threefold: childcare providers are at risk of closing their doors, parents cannot enter or remain in the workforce, and our youngest, most vulnerable children cannot access the quality early care and education they need to succeed later in life.

We have the data to prove it. We have been circulating two surveys, one for providers and one for parents, to assess the impact of Care4Kids eligibility cuts. The results are telling. Fifty-five percent of childcare providers report enrolling fewer children in 2016 than in previous years. To adapt, 40 percent have had to cut back on their own household expenses to cover program expenses. Providers are worried about the sustainability of their childcare businesses, and the state should be worried, too. Given Connecticut’s current budget crisis, the state cannot afford to lose valuable business dollars due to program closures.

Responses from parents are equally disheartening. Fifty-seven percent report that the changes in Care4Kids program eligibility have affected them. Twenty-five percent report having to reduce working hours, and 24 percent have decided not to take a job. Without access to quality, affordable childcare, parents cannot afford to work. This will have the greatest impact on low-wage industries, such as health, retail, and fast-food —all of which are important to Connecticut.

But it is not just the workforce of today that is suffering as a result of lack of access to childcare. We now know that children’s brains are literally built in the first few years of life. Research by Nobel Prize winning University of Chicago Economics Professor James Heckman, released last week, shows that investing in early childhood—even during a budget crisis—reduces social costs and promotes economic growth because children are better prepared to graduate high school and enter the workforce. Without Care4Kids, today’s children will be unprepared for tomorrow.

Connecticut must prioritize funding for childcare subsidies to preserve childcare businesses, keep parents in the workforce, and prepare children to succeed. Fail to do so, and the economy will suffer.

Jessica Sager is the co-founder and executive director of All Our Kin. Janna Wagner is also a co-founder and is chief learning officer. Natalie Vieira is the Policy Fellow at All Our Kin.

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