Commission on Early Childhood and
Child Day Care Programs

June 23, 1997, Richmond

The commission is charged with encouraging the availability of quality, affordable and accessible child day care programs in the Commonwealth and is to serve as a forum for the continuing review and study of these programs and services. The commission convened its first meeting following the 1997 Session to review the Child Care and Development Fund Plan (CCDF) which was formulated this spring by a subcommittee of the State Board of Social Services. The federal welfare reform legislation passed last year combined all federal child care funds into a single block grant. A comprehensive two-year state child care plan, the CCDF was filed with the federal government on July 1, 1997, for implementation on October 1, 1997. The purpose of the June 23rd meeting was to have the commissioner of the Department of Social Services (DSS) brief the commission on the details of the CCDF and allow a number of interested parties to respond with their concerns about the CCDF.

Prior to the meeting, commission members had formulated a list of questions about the CCDF plan to be answered by DSS. The DSS commissioner turned over his portion of the presentation to the chair of the State Board subcommittee and the DSS director of planning and policy.

Formulating the CCDF

The State Board subcommittee had six public work sessions and four public hearings during the months of March, April and May, 1997. The child care community, including advocates, providers, businesses, non-profit organizations, local agency workers and parents, were invited to comment. In addition, DSS staff provided background presentations on particular issues as the plan was developed. The CCDF goals were as follows:

• Ensure that the family child care system contributes to the broader objective of self sufficiency,
• Promote parental choice in the selection of child care,
• Address the problem of the child care waiting lists by ensuring the maximum available dollars are directed to the purchase of child care services,
• Ensure that subsidy dollars are provided to the neediest families,
• Create flexibility in the design of quality child care programs across the State, and
• Promote consumer education for parents in the selection of child care.

In order to monitor the achievement of these goals, DSS will secure the services of an independent evaluator. DSS also needs to gather demographic data on those families who receive child care subsidies in the Commonwealth in order to formulate the most equitable methodology for determining eligibility for child day care assistance.

Income Ceiling

The DSS planning director's presentation responded to questions previously raised by commission members. In order to meet the goals of serving the neediest families first and serving the waiting list population, the subcommittee and DSS determined that it was necessary to reduce the income ceiling. Under the current system, income ceilings are set at 50 percent of the state median income, with a local option to serve families with income up to 75 percent of the state median income. The CCDF uses the federal poverty level as the basic indicator for program eligibility and adjusts for local cost of living by establishing four groups with income ceilings ranging from 140 percent to 170 percent of the federal poverty level.

The lowering of the income cap in the Northern Virginia region may help address the acute waiting list problem in this region. For example, Fairfax County estimates that 392 families will no longer be eligible under the new income limits in the CCDF. Families who are ineligible under the new rules will be informed and will receive one additional year of subsidy to prepare for the transition. Localities will then be able to serve families from the waiting list with the funds freed after those families at higher income levels have been moved off the child care subsidy.

Central Reporting

Heretofore, the day care program has been locally focused with no centralized computer system or reporting requirements. DSS must put into place a computer system to track day care data in order to comply with new federal reporting requirements. Because information regarding the waiting list for subsidized care is limited, there is no way to project whether budgeted funds will be sufficient to address all the day care needs of the Commonwealth. In January 1997, a survey of each local department of social services revealed that almost 10,000 families are on waiting lists. In the interest of fundamental fairness, money will be distributed as broadly as possible under the CCDF in the hope of addressing the day care requirements of the Commonwealth's neediest families.

Comments on the CCDF Plan

Several speakers, including child care advocates and representatives of programs affected by the CCDF, welcomed the opportunity to comment on the plan.

The project finance manager of the Virginia Small Business Financing Authority discussed the Child Day Care Financing Program, which provides direct loans to child care providers to finance quality enhancements for their child care programs or to meet or maintain child care standards, including health, safety and fire codes. Through the program, over $1.9 million in financing has been approved, over 2,400 new child care spaces have opened, over 130 new employment positions have been created, and more than 6,000 children have been served in over 128 centers and family day homes in the past four years. Nevertheless, the CCDF does not include funding for the program as a quality activity. Since the 1997 Appropriations Act already funds the program for fiscal year 1998, DSS responded that it chose to devote all possible CCDF dollars to the direct purchase of day care services for children of needy families.

A representative of Places and Programs for Children, Inc., a United Way Agency, commented that the CCDF does not include a definition of quality even though it allocates four percent of the block grant for quality enhancement. The CCDF does not emphasize quality care over simple custodial care. Finally, DSS should not redefine the whole child care delivery system without knowing its true impact.

A representative of the Virginia Head Start Association stated that since Head Start programs are a significant player in the licensed child day care community, the survey on which the payment rates are based should include the daily cost per child of providing Head Start services. The scholarship program for persons employed in child day care should include Head Start staff under the Head Start to Work wrap-around program. Finally, funding for Head Start expansion is a critical provision of the CCDF.

A representative of the Virginia Association for Early Childhood Education (VAECE) voiced his concern first about the lack of specificity throughout the CCDF. Second, the Local Quality Initiative Grant Program will require wide distribution of funds and it is likely that administrative costs will be increased, thereby reducing the pool of money for quality enhancement. He suggested a regional approach to distributing the funds. Third, the CCDF's attempt at social engineering by instituting a requirement for placement of children at the end of the day care subsidy list if they are born ten months or more after the implementation of the plan is short-sighted in that it will hinder self- sufficiency. Fourth, the method of reimbursement, which pushes parents to find cheap child care in order to reduce or eliminate the amount of co-payments, could lead to the selection of poor quality and less reliable care. Fifth, VAECE expressed disappointment that the commissioner did not follow through with his promise to create a committee to develop the CCDF made up of child care specialists throughout the Commonwealth. Finally, information concerning the State Board of Social Services subcommittee meetings was difficult to obtain, with the result that it impeded meaningful public comment.

A representative of the Family Foundation supported the proposed income ceiling, which ensures that available funds will go further to serve the neediest families. The moneys appropriated by the General Assembly for expansion of the child day care Resource and Referral (R&R) program seems excessive and extravagant. Any R&R system should make it easy for parents to locate all legal, local child care providers through an unbiased listing with brief factual data about each provider.

A representative of the Proprietary Child Care Association of Virginia stated that the goals of the CCDF should be efficiency, consistency in child care policy and parental choice. He commented that any effort made by special interest and "big government" advocates that are designed to control child care and limit parental choice and provider participation should be opposed. He noted that market rates calculated at the 75th percentile of cost are a disincentive for private providers to serve low-income families and argued for a higher rate.

A representative of the Action Alliance for Virginia's Children and Youth criticized the CCDF drafting process for not involving child care professionals, as promised last year by Commissioner Carter, in the actual development of the plan and urged that they be involved in the next phase, the development of the policy and procedural details in implementing the CCDF. As drafted, the plan is unclear on how the funds will be allocated. She stated that a minimum allocation for quality enhancement programs is deficient, and urged the commission to seek stronger quality enhancement programs than the CCDF espouses. She objected to the incentive to poor parents to find the cheapest child care available: "Quality child care is never cheap. Nutritious food, dependable staff with low turnover rate, adequate materials and supplies cost money." She concluded on a positive note in commending the CCDF's emphasis on consumer education and welcomed the great opportunity that the additional child care funds will afford low income people.

A representative of Fairfax County stated that two provisions of the CCDF are problematic: the income ceiling and the parent fee increase over time. She stated that if child care costs too much at the point a family is no longer eligible for a subsidy, the family cannot maintain self-sufficiency. Recognizing that affordable child care is instrumental to the success of welfare reform, Congress allowed states to increase the income ceiling and provide care without time limits. However, the CCDF moves Virginia in the opposite direction. Fairfax County proposes the following alternative income limit:

Federal and state funds may be used to subsidize the cost of care on a sliding fee basis up to 50 percent of the local median income or income in a metropolitan area. Localities in Virginia which have the lowest median incomes may request a review of this provision and exceptions may be made to the 50 percent limit following a review by the department.

Also, the provision to increase parent fees in the fourth and fifth years would have parents pay a higher proportion of the costs irrespective of their income. Fairfax County requests that localities have the option of using a single fee scale for the entire time a family may be participating in subsidized care.

A representative of the Virginia League of Social Services Executives commended those who have formulated the CCDF for permitting league input throughout the process. However, the league disagrees with the income limits set in the CCDF and proposed the minimum income limit for eligibility be set as described in the Fairfax County proposal. The league also supports a proposal that the time limits for child care subsidies be made a local option. Further, the league proposes a thorough assessment of the administrative requirements for delivering assistance to clients and the additional burdens placed on localities in conjunction with an effort to develop and enhance existing information technology systems. Finally, the league proposes that the CCDF be implemented on a pilot basis in select Virginia localities while conducting an analysis of the changes and that an evaluation component be incorporated.

Finally, a representative from the Virginia Child Care and Resource and Referral Network stated that the CCDF contracts with the statewide Information and Referral System (I&R) to provide information on child day care availability and providers rather than Child Care Resource and Referral Agencies (CCR&R). It would make better sense to contract with CCR&R, which are established agencies already collecting the child care provider data. CCR&R provide services daily that include consumer education and counseling, child care referral, provider training and recruitment activities that increase the supply of child care in the community. I&Rs do not recruit or train child care providers unless they are affiliated with a CCR&R. Moreover, I&Rs update information annually, whereas the CCR&R's data base is constantly updated as they gather information from providers on a daily basis.

Regulations

The chair of the Council on Child Day Care provided an update on the child day center regulations. At its May meeting, council members reviewed suggestions from the Department of Planning and Budget and voted to amend the draft regulations. A revised draft of the proposed regulations has been resubmitted to the Department of Planning and Budget for economic analysis.

JLARC Review of Child Day Care in Virginia

The 1997 Appropriations Act directs the Joint Legislative Audit and Review Commission (JLARC) to examine child day care in Virginia. JLARC conducted its last review in 1990, with the result that a number of legislative changes were made. The project leader of the follow-up study stated that other changes related to child day care since 1990 include a substantial increase in the number of licensed providers, the elimination of the Virginia Council on Child Day Care and Early Childhood Programs by the 1996 General Assembly and the ongoing reorganization of DSS. The study will be presented on July 14 to JLARC and it will address the following issues:

• How well does the current regulatory system for child care ensure the Commonwealth's interest in protecting the health and safety of children in care?
• How effective is the DSS licensing program in enforcing child care regulations?
• Is state funding for child care effectively and efficiently allocated and administered?

As the meeting concluded, the chairman stated that he was troubled by some of the comments made about the CCDF and looked forward to hearing the recommendations from the JLARC study in July.