Lawmakers, policy experts and advocates gathered Wednesday at the Legislative Office Building to see if they could find a solution to the funding deficiencies facing a popular childcare subsidy program.
The Care4Kids program, which helps subsidize childcare for low-income working parents who make under 50 percent of the state median income, started experiencing a deficiency earlier this year when the federal government made changes to the program.
Over the past few weeks, the state Office of Early Childhood closed enrollment to new applicants who are teen parents and families who have received state assistance in the past, in order to erase about $1.5 million of the $6.1 million deficiency.
Gov. Dannel P. Malloy’s administration has said it’s working on closing any remaining deficiency and believes at least $2 million can be erased with unspent money for preschool slots. The remaining $2.6 million will likely be erased in the normal course of running the program.
Rep. Cathy Abercrombie, D-Meriden, who co-chairs the Human Services Committee, said from “the legislature’s” point of view not fully funding this program is not an option for the state.
“This is a program that cannot be on the chopping block,” Abercrombie said. “The reality is these are working families.”
She said they’ve been told the deficiency the program is running is expected to be worse next year.
The reason why the program costs have crept up is because the federal government, which helps fund the program, requires children to receive help for the entire year before redetermining the family based on income guidelines. Previously, families would churn on and off the program, which provided the state with more of a funding cushion.
Gerry Pastor, executive director Connecticut Child Care Association, said the decision to serve fewer families by closing enrollment to specific groups is already impacting child care providers.
The Care4Kids subsidy is anywhere between 20 to 50 percent of a childcare providers revenue stream.
He estimated that if the state reduces the program by 5,000 children it means 800 childcare staffers will lose their jobs. And that will also have an economic impact on the state.
David Wasch, legislative liaison for the Connecticut Health and Education Facilities Authority, which developed 29 childcare facilities with 5,000 slots, said “none of these programs have the ability to lose money.”
It also means that if these programs close, his agency will be looking to the state to help them pay the debt service on an empty building.
“If they stop being solvent,” Wasch said. “I will take over the programs.”
Wasch said he would have no choice but to ask the state for help paying down the debt on the buildings.
Merrill Gay, executive director of the Connecticut Early Childhood Alliance, said childcare can easily be a family’s largest expense. He said if you have two children under the age of five it’s likely that you will be paying more on a monthly basis for childcare than for your rent or your mortgage. He said childcare is not a “great paying enterprise” and most programs operate on a razor thin margin.
As a result of the changes to the program this summer, the vacancy rate at some of these providers is increasing because families are unable to pay tuition without the help of Care4Kids, Gay said.
He said he’s aware the state is facing a large budget deficit next year, but that means the state really needs to think about “what are our priorities.”
“The Early Childhood Alliance clearly believes that keeping children out of poverty by making it possible for their parents to work has to be a priority,” Gay said. Care4Kids is a “critical piece,” of ensuring children don’t fall into poverty.
Steven Hernandez, executive director of the Commission on Women, Children, and Seniors, said the forum may not have made lawmakers’ jobs easier, but it has made them more “determined” to come up with a solution.
Abercrombie said a small bipartisan group of lawmakers will be meeting to find a solution before the 2017 legislative session starts in January.