KY Policy Blog

Child Care Cuts Part of Broader Underinvestment in Early Learning

By Anna Baumann
April 8, 2013

Recent cuts to Kentucky’s Child Care Assistance Program (CCAP) and Kinship Care are part of a broader set of cuts to child care and early childhood education programs, despite solid evidence that we actually need more investment in these areas.

In January, the Cabinet for Health and Family Services announced a moratorium beginning this month on new enrollments in CCAP, a program that subsidizes quality child care for income eligible families where parents are working, participating in an educational or training program, or receiving aid through the Temporary Assistance to Needy Families Program (TANF).

Without CCAP, many parents may be forced to settle for lower quality care or quit their jobs. The cuts will also threaten the viability of many local child care centers, as described in an important new report from Kentucky Youth Advocates. Even before these cuts, many child care centers struggled.

According to 2012 KIDS COUNT data, average annual enrollment in CCAP hovered around 75,000 from 2008 to 2012, indicating that a roughly equal number of children enter the program each year as leave, presumably when they graduate onto pre-school or Kindergarten. Under the application freeze, new vacancies will not be filled and the program will shrink over time.

In addition, beginning in July, CCAP income eligibility will decrease from 150 to 100 percent of the federal poverty line, removing child care subsidies from about 14,000 children and giving Kentucky the lowest eligibility threshold in the country. The Governor’s Office of Early Childhood’s 2013 Profile reports that 29.5 percent of Kentucky’s children live under 100 percent of the poverty line, while 41.6 percent live under 150 percent.

Kinship Care, also subject to a moratorium on new enrollments, provides a $300 monthly stipend to relatives caring for abused or orphaned children. If enrollment were allowed to increase in 2013 by the same 7 percent it has on average since 2008, the program would serve about 800 more children this year. But these kids and their care givers—who must meet TANF eligibility requirements and are therefore in need—will not receive assistance.

Funding for CCAP and Kinship Care comes from state dollars and in large part from the federal government through the Child Care and Development Block Grant (CCDBG) and TANF. For a few years during the recession, federal funding for child care got a boost from federal stimulus dollars through the American Recovery and Investment Act of 2009. But ARRA has expired, and in 2012 federal child care funding from CCDBG and TANF will be 22 percent below its inflation-adjusted 2001 levels.

More federal budget cuts to early childhood programs are likely coming due to caps on future federal spending enacted in 2011 and the impact of sequestration should it remain in place. Granted, the Continuing Resolution (CR) took a little of the edge off the sequester: CCDBG will be cut by three rather than sequestration’s full five percent and TANF funding will stay at its FY 2012 level. Head Start, another important early childhood development program, will be cut by five percent minus a negligible $33 million boost.

But the small cushion the CR provides against the full force of sequestration is cold comfort given the combined impact of funding cuts at the federal and state levels. Prior to the recession, state funding for child care had received about a $10 million boost from Tobacco Settlement monies starting in 2001 and was relatively flat until 2008. Between 2008 and 2012, Kentucky General Fund and Tobacco Settlement funding for child care dropped 45 percent in inflation-adjusted dollars, and by 58 percent in terms of the General Fund alone. Especially in difficult economic times when children in low-income households are even more vulnerable, early childhood development programs need expansion.

In his most recent State of the Union Address, President Obama proposed public pre-school for all four-year-olds from low- and moderate-income families, much like Governor Beshear’s 2012 Preschool Expansion Proposal which set the goal of providing preschool for children living below 200 percent of the poverty line. These proposals reflect the widespread understanding that early childhood education is a critical component of kids’ success and an excellent investment in the economy.

But given that 53 percent of Kentucky’s kids live below 200 percent of the poverty line and that the state does not even provide funding for full-day, state-wide kindergarten, Kentucky has a long way to go towards a fully-funded, high quality system of early learning and care.

And while early childhood and child care programs get cut, in Washington the House has passed a budget with big tax cuts for high-income households and corporations and deep cuts to discretionary spending programs like child care and Head Start. Meanwhile, the state continues to ignore the need for more revenue through comprehensive tax reform but enacts a tax credit for buying a new car.

Our nation and our state must get priorities straight and generate the revenues needed to care for and invest in children.

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