IDC Affordable NY - Child Care Report FINAL
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Transcript of IDC Affordable NY - Child Care Report FINAL
1
Making it Affordable to Raise a Family in New York
New York State's working families have been struggling to make ends meet since long before the Great
Recession, but the 2008 economic crisis and slow climb out of it has taken a serious toll. The last time
families had such a low percentage of discretionary income, as they have had in these last few years, was
back in the 1970's.1 The cost of necessities such as rent, heat, food, and transportation have been eating
away at household budgets, but none more so than the rising cost of child care.
Out of all the states in the Union, New York tops the list of least-affordable child day care centers for
school-aged children, and has the dubious honor of being second place behind Oregon for least-affordable
care rates for infants and pre-schoolers.2 Child care affordability has made for too many sleepless nights
for both low-income and middle-class working parents, who are already spreading their dollars thin on
rising housing, fuel, and food costs.
Top 10 Least-Affordable States for Before-/After-School Care for a School-age Child in a Center
(2012)3
State
Average
Annual
Cost of
School-
Aged Care
in a
Center*
State
Median
Income for
Single
Mother
Family**
Cost of
Care as a
Percentage
of Median
Income for
a Single
Mother
Family
State
Median
Income for
a Married
Couple**
Cost of
Care as a
Percentage
of State and
Median
Income for
a Married
Couple
Rank
(Based on
Percentage
of State
Median
Income for
a Married
Couple)
New York^^ $11,690 $25,883 45.2 $90,725 12.9% 1
Hawaii $8,904 $28,507 31.2 $86,699 10.3% 2
Wyoming $7,800 $24,718 31.6 $78,187 10.0% 3
West
Virginia^
$6,635 $16,752 39.6 $66,649 10.0% 3
Wisconsin $7,893 $23,494 33.6 $81,050 9.7% 5
Arkansas^ $5,909 $18,503 31.9 $63,561 9.3% 6
Arizona $6,189 $25,599 24.2 $70,149 8.8% 7
Kansas $6,741 $22,966 29.3 $77,034 8.8% 7
Indiana $5,759 $21,658 26.6 $74,258 7.8% 9
Georgia $5,742 $23,223 24.7 $75,466 7.6% 10
Kentucky^ $5,389 $18,081 29.8 $70,677 7.6% 10
Montana $5,301 $20,689 25.6 $70,089 7.6% 10
Note: Affordability is a comparison of average cost against state median income. State ranking do not include the District of Columbia. Average costs for school-age child care are based on care during the school year
* Source: Child Care Aware® of America’s January 2013 survey of Child Care Resource and Referral State Networks. Some states used the latest state market
rate survey ** Source: U.S. Census Bureau, American Community Survey, 2009-2011 three-year estimates. Table B19026
^ 2011 Data, adjusted for inflation
^^ 2008 Data, adjusted for inflation
1 “Increasing Access to Child Care Assistance for Working Families,” Annie E. Casey Foundation, April 2009, p. 3 2 “Parents and the High Cost of Child Care: 2013 Report”, Child Care Aware of America. 3 Source: “Parents and the High Cost of Child Care: 2013 Report”, Child Care Aware of America.
2
Quality, affordable child care is one of the most vital supports for working families. A lack of quality,
affordable child care is the biggest barrier for parents in getting and keeping a job, much less maintaining
a career. Child care subsidies are often the difference between having a job and not having one. In
addition, subsidies make it affordable for people to move from welfare to work.
The cost of raising a new little bundle of joy has steadily grown over the years, and wages aren’t keeping
up. A middle-income couple in the U.S. will spend about $241,000 in 18 years on basic needs for one
child, and that doesn’t even include college savings.4
For New York families earning over $100,000 a year, that bill averages closer to $450,000. Housing and
child care combined can make up as much as 50% of a family’s budget.5 Add diapers, school supplies,
nutritional meals and typical medical expenses and it becomes clear that it is very difficult to afford to
raise a family in New York State.
The chart below provides a clear example of how difficult it is to afford to raise a family in New York
State. Based on a single-parent family with two children, the chart shows the percent of household income
necessary to meet each of the listed costs in a given month in Rockland County. Over half of this family’s
budget must be spent on rent and child care. In order for this family to be self-sufficient, the parent must
earn $5,696 per month, which is $68,357 per year.6 Although the median household income for Rockland
County is $82,677 per year, almost 45% of households earn less than the self-sufficiency standard in
that county. A little over 10% are at the poverty level or below.7
Source: “The Self-Sufficiency Standard”, Pearce, Diane. Center for Women’s Welfare, University of Washington School of Social Work, Empire Justice
Center, NYS Community Action Association. June 2010. http://www.selfsufficiencystandard.org/pubs.html.
4 Average cost to raise a kid: $241,080. Hicken, Melanie. CNN Money. August 14, 2013. http://money.cnn.com/2013/08/14/pf/cost-children/ 5 “The Self-Sufficiency Standard for New York State 2010”, Pearce, Diane. Center for Women’s Welfare, University of Washington School of Social Work,
Empire Justice Center, NYS Community Action Association. June 2010. http://www.fiscalpolicy.org/SelfSufficiencyStandardForNewYorkState2010.pdf 6 “The Self-Sufficiency Standard for New York State 2010”, Pearce, Diane. Center for Women’s Welfare, University of Washington School of Social Work,
Empire Justice Center, NYS Community Action Association. June 2010. http://www.fiscalpolicy.org/SelfSufficiencyStandardForNewYorkState2010.pdf 7 Selected Economic Characteristics for Rockland County, NY, 2012 American Community Survey 1-Year Estimates. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_12_1YR_DP03&prodType=table
Miscellaneous 7%
Housing 26%
Child Care 28%
Food 9%
Transportation 1%
Health Care 8%
Taxes-Net* 21%
Percent of the Self-Sufficiency Standard Needed to Meet Basic Needs
in Rockland County, NY One Adult, One Preschooler, and One School-age Child in 2010
TOTAL MONTHLY SELF-SUFFICIENCY WAGE = $5,696
3
Likewise, a single-parent family with two children in Westchester County also spends over half of the
family’s budget on rent and child care. In order for this family to be self-sufficient, the parent must earn
$5,961 per month, which is $71,533 per year. 8
Although the median household income for Westchester
County is $77,293 per year, 48.8% - almost half of households - earn less than the self-sufficiency
standard in that county. About 7.5% are at the poverty level or below. 9
Source: “The Self-Sufficiency Standard”, Pearce, Diane. Center for Women’s Welfare, University of Washington School of Social Work, Empire Justice Center, NYS Community Action Association. June 2010. http://www.selfsufficiencystandard.org/pubs.html.
Child care costs alone can be so high that it forces a family into keeping one parent at home – even if he
or she wants to work and the family needs his or her income. These decisions are based on cash flow
rather than personal values or future economic potential. Since 2000, the cost of child care has increased
twice as fast as the median income of families with children,10
and parents are struggling to make ends
meet.
The average cost of day care across New York State ranges from a low of approximately $7,000 a year in
the Southern Tier to a high of $16,000 a year in New York City.11
The sticker shock is highest for new
parents who pay an average of $10,400 per year per infant. As the child ages and becomes a little more
self-sufficient, the price begins to drop to an average of $9,100 per year for toddlers and $8,300 per year
for school-age children. A family with two children often pays more in child care than in rent. These
numbers can be particularly devastating to families making at or below 200% of the federal poverty level
($47,100 for a family of 4).
The IDC recognizes that working families need a strong financial commitment from the State to help
them with this vital part of their household budget – safe, quality care for children so parents can work or
go to school. This is why the IDC is proposing $182 million in additional funds to the NYS Child
8 “The Self-Sufficiency Standard for New York State 2010”, Pearce, Diane. Center for Women’s Welfare, University of Washington School of Social Work,
Empire Justice Center, NYS Community Action Association. June 2010. http://www.fiscalpolicy.org/SelfSufficiencyStandardForNewYorkState2010.pdf 9 Selected Economic Characteristics for Westchester County, NY, 2012 American Community Survey 1-Year Estimates.
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_12_1YR_DP03&prodType=table 10 “Affordable Child Care for Families”, Child Care Aware of America. March 2013. 11 “Child Care Cost Rising $730.00 each year in New York” Office of Kirsten Gillibrand, United States Senator for New York”
Miscellaneous 7%
Housing 26%
Child Care 27% Food
9%
Transportation 2%
Health Care 7%
Taxes-Net* 22%
Percent of the Self-Sufficiency Standard Needed to Meet Basic Needs
in Westchester County, NY One Adult, One Preschooler, and One School-age Child in 2010
TOTAL MONTHLY SELF-SUFFICIENCY WAGE = $5,961
4
Care Block Grant. First, $82 million to restore the subsidies to their highest level in five years, and
second, $100 million to the Facilitated Enrollment subsidy program to begin expanding it statewide.
Child Day Care Subsidies in New York State
The New York State Child Care Block Grant (CCBG) provides some support for parents who need child
care so they can go to work or school, including subsidies that pay child care providers for a large part of
their fees. Unfortunately, the block grant has never been able to meet the need, and worse, has been
shrinking over the years.
In 2012, there were 836,469 children in New York State under the age of 6 with working parents, and only
about 21,400 licensed day cares serving children up to age 12. Overall, 690,000 children were cared for
by these providers across the state, but only about one-third (234,000) of them received subsidies.12
In
New York City alone, approximately 40,000 families are on waiting lists for subsidies.13
Demand is high
and costs are soaring right up along with it.
The IDC has taken a closer look at how child care is funded in New York State and New York City, and
the various subsidy supports for working families. What we found is that families in need of help paying
for the high cost of New York child care are being turned away due to lack of funds.
As shown in the chart below, the NYS Child Care Block Grant (CCBG) was funded at nearly $1 billion
($999,328,543) in 2010-11. In 2013-14, it was only funded at $917.5 million ($917,500,158), representing
cuts from both the state and federal governments of nearly $82 million ($81,828,385) in 2013-14 over just
three years earlier.14
Child care subsidies are supposed to be available for New York State families with
household incomes up to 200% of the federal poverty level, but with the funding shortfall, several
counties have been cutting back to provide subsidies for fewer families, cutting the eligibility to as low as
100% of federal poverty ($23,550/family of 4).
15
12 “Child Care Facts and Figures”, New York State Office of Children and Family Services. April 2013. <http://ocfs.ny.gov/main/childcare/assets/child%20care%20data%2004-2013%20FactSheet.pdf>. 13 “Increasing Access to Child Care Assistance for Working Families,” Annie E. Casey Foundation, April 2009, p. 3 14 NYS Budget SFY 2009-2014 15 Source: Antos, Susan. "Child Care in the NYS Budget SFY 2009-2014." Empire Justice Center, July 2013.
$977,771,336 $999,328,543
$916,945,694 $923,945,694 $913,252,704 $917,500,158
SFY 2009-10 SFY 2010-11 SFY 2011-12 SFY 2011-12 W/SPECIAL
SESSION
SFY 2012-13 SFY 2013-14
Child Care Funds in NYS Budget SFY 2009-2014
Total Child Care Block Grant Funding
5
With these funding cuts, a two-parent family with two children earning $51,625 a year in 2007 would be
expected to pay over $23,000 in child care, nearly half their income. The same family would be expected
to pay only four percent of their annual income toward college tuition.16
In New York State, it can cost
more to send a child to day care than to send him or her to college.
To highlight how woefully underfunded the block grant is, consider that nearly half of New York City's
1.1 million children under the age of 13 are in families with incomes that would qualify them for
subsidized child care. In 2008-09, there were about 543,000 potentially eligible children, but only about
104,000 child care subsidies were provided in NYC that year.17
Less than 20% of eligible children
received a subsidized child care slot.
In Rockland County, 27,649 (37.8%) families have a household income of less than $75,000.18
Depending on family size, just about all within that cohort could be eligible for subsidized child
care. In Westchester County, about 58,702 (39%) families could be eligible.19
Imagine suddenly losing your ability to pay your child’s day care center because your subsidy was cut.
Families have been scrambling to either find affordable care or be forced to leave their jobs. New York
must not only restore the $82 million in child care subsidies that have been cut these last few years, but
must find a way to bring more families into the realm of affordable child care.
“My daughter, [who] is in the 12th grade in high school, had to cut classes every day to pick up my
youngest daughter; since I get out of work at 2:00 pm, I was not able to arrive on time to pick her up from
school. Once my oldest daughter's school realized that she was cutting they asked her why and she told
them our situation - they called and told me that [there were] going to be . . . serious problems if I did not
solve this issue. I became extremely nervous and guilty that she was cutting class for that, but thank God
[it] was resolved. The [subsidy] program has been very beneficial for us and my daughter doesn't have to
cut class anymore.” Nancy, Home Attendant, Queens.20
Prioritize Child Care in the New York State Budget – Add $182 million to the NYS Child Care
Block Grant.
The high need in New York State for affordable child care is why the IDC is proposing to fund the NYS
Child Care Block Grant with an additional $182 million over 2013-14 funds, surpassing its highest level
in the past five years of nearly $1 billion ($999,328,543) in 2010-11 to help those families who have been
squeezed out of help for necessary child care costs.
The block grant provides a series of child care subsidies to help parents afford to work while their
children are in safe, quality child care settings, but those subsidies have been cut to the bone over the
years. Specifically, the IDC would restore the $82 million in cuts to general child care subsidies, and
increase the Facilitated Enrollment subsidy program by $100 million, making it a permanent
program on its way to becoming statewide.
16 “Increasing Access to Child Care Assistance for Working Families,” Annie E. Casey Foundation, April 2009, p. 4 17 “Wrenching Choices for New York City’s Working Families—Child Care Funding Slashed as Need Grows.” Fiscal Policy Institute, May 11, 2011, p. 3. 18 Selected Economic Characteristics for Rockland County, NY, 2012 American Community Survey 1-Year Estimates. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_12_1YR_DP03&prodType=table 19 Selected Economic Characteristics for Westchester County, NY, 2012 American Community Survey 1-Year Estimates.
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_12_1YR_DP03&prodType=table 20 Parent statement provided by New York Union Child Care Coalition, with permission.
6
Restore $82 million in previously-cut child care subsidies in the NYS Child Care Block Grant
For low-income families in New York who rely on subsidized child care so they can work, continuity in
subsidy coverage is necessary for stability in child care arrangements. Parents, who are unable to afford
licensed day care providers, are sometimes forced to choose between placing their children with less
reliable options or leaving them home alone. Some parents are forced to reduce work hours or quit jobs
altogether to remain home and care for their children when they lose their subsidies due to budget cuts.
Families moving up the income ladder have been forced to turn down promotions or positions that could
continue moving them along due to struggles with affordable, quality child care.
That is why the IDC believes it is vital to increase funds to the CCBG, helping to reach those families
who have been denied subsidies or never been eligible for them before. The restoration of $82 million in
subsidies will go a long way to improving affordability for raising a family in New York State.
Additionally, the expansion of child care subsidies would have a positive rate of return on the economy. In
the short term, more parents would be able to afford to return to work. Employee absenteeism due to child
care issues costs U.S. business $3 billion every year.21
As more parents can afford to return to work, that
time on the job translates into seniority, increased job skill, and higher earnings. The IDC understands
that added funds to the child care subsidy program in New York State are necessary to bring back in those
families who have lost subsidies due to budget cuts, and keep them on an upwardly mobile career path.
Children would benefit greatly too. Many of these state and city-funded facilities include an early learning
component. For children of low-income families, quality care combined with learning can bring benefits
that are enjoyed well into adulthood. We know early learning can lead to increased earnings, higher
education, improved physical and mental well-being for the child, and ultimately public expenditure
savings and increased tax revenues justifying the initial investment of public funds into child care
subsidies. Economists estimate the rate of return for high-quality early intervention child care for low-
income families to be about 6-10% per year.22
Restoring the general subsidies in the NYS Child Care
Block Grant to their 2010-11 levels would cost the State about $82 million and open about 13,000
new child care slots statewide.
Child Care Block Grant’s General Subsidy Restoration Proposal
Current Level of Block Grant Funding
(excludes most local funds)
$917,500,15823
Current Children Being Served
Approximately 234,000
General Subsidy Cost Per Child
(includes local funds)
Approximately $6,30824
Additional Proposed Revenue
$82 million
Additional Children Served
Approximately 13,000
Total Children Served Under IDC Plan
Approximately 247,000
21 “Parents and the High Cost of Child Care: 2013 Report”, Child Care Aware of America. Page 9. 22 “Parents and the High Cost of Child Care: 2013 Report”, Child Care Aware of America. Page 10. 23 2013-14 state and federal funds, does not include all local-source funds. 24 Paid with a combination of federal, state, and local funds.
7
Expand the Facilitated Enrollment Child Care Subsidy by $100 million and 400% of Federal
Poverty Level.
Working families who receive Temporary Assistance for Needy Families, as well as those who out of
reach of public assistance, are in desperate need of relief from rising child care costs. Recognizing this,
the Facilitated Enrollment Program was created as a child care demonstration program to assist working
families with the high cost of quality child care programs. Additionally, the facilitators work with the
Administration for Children’s Services in NYC and county DSS facilities in Albany, Monroe, Oneida,
Rensselaer and Schenectady counties to assist people through the application process and continuing
services of child care subsidies.
Funding for the Facilitated Enrollment project is administered through the New York State Office of
Children and Family Services (OCFS), and it is currently operated by three non-profit organizations:
Consortium for Worker Education (CWE), Workforce Development Institute (WDI), and Children’s
Institute (CI) in coordination with local Departments of Social Services in each county and ACS in New
York City.
The Facilitated Enrollment Program provides a unique model that combines subsidy administration with
parent education and information. Since the project’s inception, close to 3,900 families and over 6,400
children have been served through the pilot sites.25
“Facilitated Enrollment allows me to work and achieve my goals, instead of having to be a stay-at-home
mom by necessity. It also helps me to have a peace of mind while I am at work, while putting costs down.
It makes me feel as if I’m not working to pay just for childcare.” Charlene, mother of two children ages
18 months and 4 years.26
It is currently funded at $7.3 million of TANF monies through the Child Care Block Grant. Eligible
families are up to 275% of the Federal Poverty Level (FPL), which is a $64,763 household income for a
family of four, but – as recognized in the NYS Child Health Plus program – families up to 400% of FPL
($94,200/family of 4) are struggling to make ends meet and also need help.
“The Child Care Facilitated Enrollment Program is very important for working families [as it] alleviates
financial hardships . . . with this program I am able to sleep at night . . . I used to buy a lot junk food; now
I’m I am able to buy healthier food for my children . . . the Child Care Facilitated Enrollment Project
[enables us] to eat better.” Christopher, Assistant Coordinating Manager, New York.27
Counties are authorized to charge families a copay for child care services of 10-35% of the families’
income above the poverty line. Too often, the 35% copay for families at 250% FPL and above is more
than the cost of child care, so even with additional program funds, too many of those families are turned
away.
New York must not only restore the $82 million in child care subsidies that have been cut these last few
years, but must find a way to bring more families into the realm of affordable child care. The highly
successful Facilitated Enrollment Program has proven its efficiency and effectiveness to become a
permanent statewide program. That is why the IDC proposes a $100 million expansion of the
Facilitated Enrollment subsidy within the NYS Child Care Block Grant, opening the doors to about
14,285 more children in the program.
25 “Increasing Access to Child Care Assistance for Working Families,” Annie E. Casey Foundation, April 2009. 26 Parent statement provided by New York Union Child Care Coalition, with permission. 27 Parent statement provided by New York Union Child Care Coalition, with permission.
8
Facilitated Enrollment Proposal
Current Level of Funding
$7.3 million
Current Children Being Served
Approximately 1,042
Subsidy Cost Per Child
Approximately $7,000
Additional Proposed Revenue
$92.7 million to bring to $100 million
Additional Children Served
Approximately 14,285
Total Children Served Under IDC Plan
Approximately 15,327
There are three parts to this expansion. First, the program’s funding would be increased to $100 million.
Second, the participation of the program would reach further into the middle class by allowing families up
to 400% of the Federal Poverty Level ($94,200/family of 4) to be eligible. Finally, the program would
address a long-standing problem with the family contribution to the child care costs (family copays) by
capping the family portion to 10% of the family’s household income.
There is precedent for eligibility to reach 400% - the Child Health Plus program currently funds up to this
federal poverty level.28
This would not only capture families pushed out due to budget cuts, but also
expand the program to middle income families that have been struggling since the Great Recession.
Also, requiring a cap on family copays of 10% of a family’s total household income will make the
Facilitated Enrollment subsidy more available to families who are not on public assistance but still need
help. Counties are authorized to charge families a co-pay for child care services of 10-35% of the
families’ income above the poverty line. Too often, the 35% copay for families at 250% FPL and above
ends up being more than the cost of child care, so even with a $100 million addition to program funds,
struggling working families would still have to pay the full cost of expensive child care. This cap assures
they would get at least some assistance.
“We all know that realistically it is not affordable for a middle class working person to be able to afford
quality child care. I am a full time working mother of two [and Facilitated Enrollment] made it possible
for both my daughters to attend 1199 Future of America Learning Center. This made a [huge] difference
in our family financially and mentally.” Joana, Medical Secretary, Bronx. 29
Conclusion – the IDC calls on NYS to Commit to Child Care
New York State must prioritize a more committed investment in our children and working families so
children can receive consistent, quality care, and parents can have the peace of mind to maintain and
thrive in their careers as dependable employees. The IDC’s proposed $182 million increase to the NYS
Child Care Block Grant of an $82 million subsidy restoration and a $100 million expansion of the
Facilitated Enrollment child care subsidy is a package that will bring long-overdue relief to working
families.
28 2013 NYS INCOME AND RESOURCE STANDARDS AND FEDERAL POVERTY LEVELS (FPL), NYC Department of Social Services.
http://www.nyc.gov/html/hra/downloads/pdf/services/micsa/mapdr_01.pdf 29 Parent statement provided by New York Union Child Care Coalition, with permission.