May 29, 2007

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Child Care Subsidy Program

2007 Legislative Session

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Over the past several years, the Kids Are Priority One Coalition and the Child Care Advisory Board have worked diligently to raise awareness among legislators about the important role that the state’s Child Care Subsidy Program plays in Vermont’s economy and in healthy child development. We have highlighted the ways in which outdated income eligibility guidelines and reimbursement rates limit parents’ child care options and prevent low-income families from accessing the financial assistance they need to enter and remain in the workforce.

It seems that this work is beginning to make a difference.

The legislature approved a 3% rate increase. The governor’s proposed budget contained a 2% increase. The legislature raised that increase to 3%. This increase includes all categories except legally exempt providers.

While 3% is not enough to make a big difference for children or families, it is still a victory, given a very tight state budget. Thank you to everyone who contacted legislators about this important program.

We also sought establishment of a study committee in order to focus attention on the importance of the subsidy program and the serious underfunding. As we found with the preschool education issue, study committees can provide a valuable opportunity to have an in-depth discussion with legislators about important and complex issues. This type of discussion is very difficult during the legislative session.

S.177, which creates the Vermont Child Poverty Council, will provide us with that opportunity. Thank you to everyone who supported this legislation and contacted their legislators about it.

The Council is charged with developing a 10-year plan to reduce by at least 50% the number of children living in poverty in Vermont. Early care and education is specified as one area that requires additional funding. It is in this context that we will be able to make the case for:

bringing child care subsidy reimbursement rates up to market rate;
bringing income eligibility guidelines up-to-date;
ensuring annual adjustments to both to ensure that the program is serving as many low-income working families as possible and reimbursing early childhood programs at a rate that mirrors actually rates charged.

For a copy of the bill, go to: http://www.leg. state.vt. us/docs/legdoc. cfm?URL=/ docs/2008/ bills/passed/ S-177.HTM.

Voices for Vermont’s Children worked on the development of this legislation and will have a representative on the Council. As one of the Kids Are Priority One sponsoring organizations, Voices’ seat at the table will provide early childhood activists with access to the Council’s deliberations.

The legislature also approved H.523, An Act Related to Moving Families Out of Poverty.

The main purpose of the legislation is to respond to the extensive changes made at the federal level to the rules covering federal funds for families under the program called “Temporary Assistance to Needy Families” or TANF.

Since childcare is a critical part of low-income families’ efforts to enter the work force and move away from public assistance, House and Senate committees reviewed the childcare subsidy program and included findings and request for information:

· Section 21 of the bill includes legislative findings regarding the importance of investing in the early years, the economic conditions facing Vermont’s families, and the shortfalls in the Child Care Subsidy Program.

· Section 22 calls on the Department for Children and Families to report to the legislature by November 1, 2007, with:

o an estimate of the funding needed to bring income eligibility guidelines to current levels;

o an estimate of the funding needed to bring Vermont into compliance with federal guidelines, suggesting that subsidies should be at least 75 percent of the market rate;

o an assessment of the positive and negative outcomes from modifying the current statewide subsidy rate to differential rates based on the market rate for the area; and

o an analysis of possible inflation factors with a recommendation on which factors to use once target funding levels have been met.

· Section 22 also instructs Legislative Council and the Joint Fiscal Office to “…provide a summary of innovative ideas from other states for funding investments in quality child care and of any available cost-benefit analyses of such investments.”

The attached document shows these sections (21-22) of the bill.

For a copy of H.523, go to: http://www.leg. state.vt. us/docs/legdoc. cfm?URL=/ docs/2008/ bills/passed/ H-523.HTM.

Passage of both bills signals an increased understanding among legislators about the importance of investing in early childhood development and the role that working families play in Vermont’s economy. Discussions in House and Senate committees during the session this year showed that policy makers are thinking more about the need to cure the underfunding of the subsidy program. Work over the coming summer and fall should help us move closer to our goal of increasing public support for families struggling with the high cost of child care. Stay tuned!

For more information, contact:

Barbara Postman, Kids Are Priority One Legislative Director, Voices for Vermont’s Children, (802) 229-6377 or bpostman@voicesforv tkids.org

Kim Friedman, Kids Are Priority One Organizing Director, Windham Child Care Association, (802) 348-9879 or kfriedman@windhamch ildcare.org

www.kidsarepriority one.org

Kids Are Priority One is a statewide early childhood coalition of individuals, organizations and businesses committed to ensuring that every child in Vermont gets a good start.