State continues to turn away eligible families

The State began turning away all eligible families and placing them on a “waiting” (denial) list in February 2009.  The Governor and legislature will continue to turn away all eligible children until June 2011, phasing out the subsidy for low income working families. As families struggle in the current economy to provide for and protect their children, the State has stopped helping low income parents who want to work and cannot afford child care.  The short-sighted decision to reduce a child care subsidy jeopardizes the safety of children and is having a serious negative economic impact: reducing employment and damaging small businesses and non-profits.

FAMILIES WANTING TO WORK ARE BEING TURNED AWAY WITH NO END IN SIGHT. All eligible low income working families have been turned away for a year.  Parents are denied child care at the very time parents need help to accept a job or keep working.  The State provides child care for families with ties to welfare and CPS, but phasing out subsidy for new parents wanting to work to avoid welfare:

• 48,300 children received subsidy in February 2009 versus 30,300 in February 2010 (est.)
• With 18,000 fewer children, the subsidy has decreased by 37% already.
• 11,391 children were on the turn away list on February 26^th with 17,000 children expected to be turned away by June 2010.
• Child care for low income working families will be virtually eliminated by 2011.
• By June 2011, only 20,000 to 24,000 children, or 50-60% fewer, will receive a subsidy.

THESE PARENTS HAVE NO GOOD OR SAFE OPTIONS. Families only seek State help with child care when they have no other options.  Without state assistance parents have no choice but to leave their children home alone or with siblings, or boyfriends, quit or reduce work hours, use caregivers who do not meet basic qualifications, or seek other more costly State aid to support their family.

CUTTING CHILD CARE COSTS MORE. The cuts have increased unemployment.  Parents lose jobs when denied a subsidy and fewer children in care results in the elimination of teaching jobs. Employers do not hold low wage jobs for parents with no hope of getting off the turn away list.

• At least 2,250 jobs in child care have been lost due to the “turn away” list.
• Ultimately 3,500 jobs will be lost in child care and over 5,250 total jobs will be lost in Arizona.

PERMANENT DAMAGE TO CHILD CARE IN ARIZONA. Payment rates for providers who serve poor children have been pushed back to the cost of care in 2000 and parents’ required share of costs increased significantly. The dramatic decline of public support for child care jeopardizes the entire child care infrastructure that all working parents rely on and that provides employers with a stable workforce:  Reduced State support will result in centers closing, particularly in low income neighborhoods.

We call upon the Governor and Legislature to find solutions to remove children from the denial list and serve all eligible low income parents who need child care assistance to work.  Protecting essential safety net work supports, allowing working poor families to place their children in safe settings is the right thing to do for children, families, and Arizona.

CHILD CARE LICENSING FEES AND SB 1315

BACKGROUND:  The State had not increased fees for many years.  Centers paid $150 fee for a 3 year license.  The Auditor General recommended a study of the impact of increasing fees with recommendations to the legislature.  The Governor proposed removing all General Fund from DHS licensure and in the third special session, HB 2013 gave the DHS the authority to raise fees.  In October, a proposed increase would have raised fees astronomically.  In response to public comments, DHS developed a program that tapped federal and other funds to reduce fees for participating facilities and offset their costs by up to 50% in total. 

DHS Fees as Originally Proposed, Revised, and with Empower Program

Licensed Capacity Group	# of  License (as of 9/8/2009)	October Proposed 3-year  Licensing Fees	Proposed Annual Fee	New 3 year fees	New Annual fees	New 3 Year fees with Empower	New Annual with Empower Discount
5-10*	441	$581	$193.67	$1,000	$333	$500	$167
11-59	689	$2,218	$739.88	$4,000	$1,333	$2000	$667
60-99	535	$4,578	$1,526.00	$7,800	$2,600	$3,900	$1,300
100-149	488	$7,380	$2,460.00	$7,800	$2,600	$3,900	$1,300
150 +	581	$13,442	$4,480.67	$7,800	$2,600	$3,900	$1,300

*Primarily Group Homes.  There are 2,734 facilities 441 providers pay $1,000 or $500; 689 providers pay $4,000 or $2,000; and 1,604 pay $7,880 or $3,900.  Late filing fees are 10% of the license fee.

PURPOSE OF THE CHILD CARE FEE BILL

1.  Require a time and cost study consistent with the Auditor General recommendations.

2.  Require revision and implementation of the health and safety regulations.

3.  Revise fees based on study and regulations and adjust fees previously paid.

4.  Change how and when fees are paid to simplify future revisions and adjustments.

SB 1315 will be scheduled to be heard in the Senate Healthcare and Medical Liability Reform Committee on Wednesday February 24^th. at 9:00 AM

SUMMARY OF SB 1315

SB 1315 contains statutory changes and session law affecting both Child Care Centers (ARS 36-882) and Child Care Group Homes (ARS 36-897.01).  Provisions include:

Requires DHS to conduct a study of its costs to license child care and to identify specific costs for:  the licensing and certification process, inspections, complaints, enforcement, training, technical assistance, and consumer assistance.

The study shall analyze how the costs are related to the type and size of the facility and identify any other related costs that are included in the licensure fees.

DHS shall consult with representatives of licensed facilities in conducting its study.

The study shall assess the efficiency of the department’s regulation of facilities and develop recommendations to improve the efficiency and cost-effectiveness of its regulation without jeopardizing the health and safety of children.

DHS shall submit a written report of the study findings and recommendations to the Governor and legislature by October 1, 2010.

DHS shall adopt rules to streamline its health and safety regulations consistent with current law (36-883) by October, 2010.

The revised rules are exempt from the formal rule making process for one year.

DHS shall adjust fees based on the findings of its study and rules adopted.

Changes the payment of licensing fees from every three years to annual payments.

Instead of current 3 year license, licenses will be non-expiring but may still be revoked or suspended for cause or non-payment of fees. (12 other states do not require reapplication).

Allows facilities to make installment payments for licensing fees.

DHS shall review its actual costs to administer licensing at least every two years.

If costs are lower than the fees collected, DHS shall refund the overpayment

POLICY ISSUES NOT ADDRESSED BY SB 1315

Child care facilities should not be required to “fully fund” licensure. No other state requires centers to fully fund.  Licensed facilities protect children, allow parents to work, prepare children for success in school, provide constructive after school care, and are important to the State’s economy.  DHS taps uncapped federal matching funds that allow licensed health care facilities to pay a third of the cost of licensure.

The fees are still too high. Arizona’s new fees are the highest in the country, based on a capacity of 100.  For centers with space for 60 or more children, DHS charges $3,900 (discounted).  A study published in 2009, found that 18 states do not charge any licensing fees. Of the 31 other states that do charge fees, only five states charged more than $500.

The use of other funds to offset fess should be made permanent These or other funds should be available on a permanent basis to continue the fee reductions.  There should be a mechanism to ensure that DHS utilizes other funds to offset child care facility fees for licensure by no less than 66%.   Also, the statutory requirement that 10% of the child care licensing fees should be paid to the General Fund should be reviewed.

Early Care & Education Consortium

The Early Care and Education Consortium is a non-profit alliance of America’s leading providers of quality early learning programs. Consortium members operate over 8,000 licensed centers caring for and educating nearly 800,000 children every day across the country. The Early Care and Education Consortium is an advocacy voice for child care providers as policies for child care and early learning develop and change across the country. For more information about our policy priorities and our members, click here to visit our website.

National News

National Women’s Law Center

 

The child care needs of American women and their families have increased dramatically as women with children have entered the paid workforce in unprecedented numbers. Yet high-quality child care is too often unaffordable or simply not available. Women and their families thus have a tremendous stake in public policies that will help make high-quality child care available and affordable to those who need it. That is why the National Women’s Law Center is working to improve the quality, affordability, and accessibility of child care, with a special emphasis on ways to expand public and private financing of the changes needed to achieve these goals.

Click here to visit the National Women’s Law Center website.