Concern Rises Over Potential Freeze to Child Care Subsidy Rates

An update from John Cavanaugh, our COO:

The Lincoln Journal Star is to be commended for recognizing, in an April 11, 2017 Editorial, Freezing care rates a mistake, that LB 335 is a misguided budget measure proposed by Governor Ricketts. Not only will it be more difficult to replace the funds withheld from childcare providers serving the children of working poor families in future years, but the damage done to the quality of care provided these children will be immediate and long lasting.

The parents of children served by childcare providers receiving subsidy dollars are the poorest of the working poor. They are often single parents working for minimum wage jobs and earning less than $25,000 a year. The current subsidy payments are already far below the market rate for childcare, leaving programs that accept the subsidy struggling to provide high quality care with properly compensated and educated staff. 

(It should be noted Senator Bob Krist simply sought to limit the damage of LB 335 by establishing a firm floor on the freeze.) We know that low quality childcare results in producing children not prepared for kindergarten and destined for low performance and failure in K-12. LB 335 is bad because it will damage the chance for success for 30,000 Nebraska children and cost everyone much more in the future. 

Editorial, 4/11: Freezing care rates a mistake 

Lincoln Journal Star editorial board

April 10, 2017

Anyone who's ever managed a household budget knows that sometimes a short-term savings can prove costly over the long haul. Trying to hold off on that new roof can cost a pretty penny when that torrential spring rain hits. Waiting on a oil change can lead to a far more costly repair down the road. 

The money and the stakes are higher, but it's the same with LB 335, a measure that would reportedly save the state $7.4 million by freezing the rates the state pays child care providers caring for children of low-income families while a parent is working in school or in vocational training.

Every two years - prior to work on the biennial budget - a survey establishes the market rate for child care. Currently, depending on certain performance standards, child care providers can receive from the state reimbursement at a rate of between the 60th and 75th percentile of the established average rate for care. 

An amendment by Sen. Bob Krist to LB 335 would reduce the amount to the 50th percentile or hold it at the current rate, whichever is higher. The bottom line, however, would be a cut to the money that's going to the very worthy cause of helping families who are trying to help themselves. 

This money available through the child care subsidy is the only support for families trying to get off government assistance. The program is very focused, paying the child care provider through vouchers only for days the parent is actually on the job or in a classroom. 

Two years form now will the price of child care have gone up? That, like with any other product or service, is a pretty good bet. And will lawmakers and the governor be excited about the bigger expense of catching up on the subsidy? Or will we begin a series of budgets where we continue to fall further behind on the subsidy rate, forcing child care providers to steer clear of lower-income families who can't pay the average market rate? 

LB 335 certainly will save some money, but it will bring an immediate cost if it makes it harder for low-income families to get the child care that makes employment and education possible. And it will bring an even heftier price when we have to play catch-up in the next biennium. 

Click here for the link to this editorial on the Lincoln Journal Star's website.


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