Last week was the final week to submit comments to the federal Administration for Children and Families – Office of Child Care regarding proposed rule changes to the Child Care and Development Fund (CCDF). The CCDF is a federal program that provides a subsidy to child care providers to allow low-income parents work or attend training/education. In Michigan, 27,700 families benefit from the child care subsidy to support care for their young children and before- and after-school care for children through age 12. The CCDF currently gives states the flexibility to design subsidy systems that take into account local market dynamics, budgetary limitations and other factors unique to the local child care landscape which has resulted in significant differences in the child care subsidy system across states. Many of the proposed rule changes would tighten up some of this flexibility based on research and data on what children and families need through a child care subsidy system. The proposed rule changes would increase quality and access to child care for Michigan’s lowest-income families and would assist us in moving towards a more family-friendly child care system.
One of the proposed changes is to require rather than allow a period of job search for families receiving child care assistance who lose their jobs. Michigan is only one of four states where families who receive the child care subsidy immediately lose this benefit if they lose their job. In Michigan, where we’re continuing to rebuild our economy and struggle with unemployment rates higher than the national average, the lowest income earners are often the ones who have the least stability in their employment. Thus, allowing some period for job searching can ensure that families retain their subsidy and that children can have some consistency in their care.
Another proposed change would require states to include a description of how their payment practices take into account the quality of child care and support high quality. While the CCDF was set-up primarily as a work support, it does require states to spend at least four percent of their CCDF funds on activities designed to improve the quality of child care to promote healthy child development. In Michigan, this has supported efforts to boost quality in child care settings for young children, but no efforts have been made to reform the payment structure to support higher quality settings. This rule change would be a struggle for Michigan, since we’re one of three states that reimburse providers on an hourly schedule, with the vast majority of states providing daily, weekly, or even monthly payment structures that are more aligned with the current child care market. Providing an hourly rate makes it more difficult for child care providers to provide quality care if they’re not receiving payment for times when a subsidized child is absent – times when private paying families would consistently be paying for their child care slot. This inconsistency in payment makes it difficult for providers to rely on a consistent source of revenue to support their quality programming.
Furthermore, Michigan’s subsidy payments are sorely inadequate to ensure access to high quality child care. Current CCDF rules require states to survey child care providers’ market rates every two years and recommend that rates be set so that families would be able to access 75 percent of the child care providers in their community (the 75th percentile). However, this is currently a suggestion rather than a mandate. In Michigan, payment rates vary between $1.35 an hour to a maximum of $3.75 an hour, depending on the age of the child and the setting for which s/he receives care – falling significantly short of the recommended 75th percentile. For example, for a Michigan family to send their four-year-old to a child care center would cost, on average, $974 per month but with the child care subsidy, would only receive $433 per month. Clearly these reimbursements are inadequate for parents to purchase high quality care. If Michigan truly wants to provide a quality experience for low income children, providing a more robust reimbursement rate that aligns with the market would ensure that families can access the types of out-of-home learning environments they seek for their children.
Overall, the proposed rule changes to the CCDF are welcomed here in Michigan as we continue to build a comprehensive P-20 education system that also supports children in child care settings. Access to high quality care can ensure that young children are better prepared for kindergarten and that students in elementary and middle school can access quality before- and after-school programming that promotes their learning. Critical steps include: allowing families to maintain their subsidy when they lose their jobs and are seeking new employment; shifting the payment structure to daily, weekly, or monthly rates; and increasing the subsidy payment. Regardless of the eventual rule changes, Michigan needs to work more proactively to provide a more family-friendly system that would allow families to access consistent, quality child care.