Mary Jo Pitzl Arizona Republic
Published 7:00 AM EST Jan 2, 2019
Ché Jackson felt she had no choice but to quit her job when her state child care assistance wasn’t enough to cover the tab.
A single mom of three, Jackson couldn’t add to the money the state provided for child care. She also couldn’t afford to quit work.
But quit she did, because she wasn’t about to leave the kids on their own.
So for one year, she stayed home, relying on family and other forms of state assistance to get by.
“Home alone? Not a chance,” Jackson said. She feared she could be reported to the state Department of Child Safety for neglect, which could lead to her children being removed from her care.
Child care can keep kids out of foster care
Child-welfare advocates, as well as the state agency that administers the child care program, recognize that access to affordable and high-quality care are keys to not only keeping kids safe and families together, but also a good start in school.
But the child care safety net the state provides for lower-income families is thin. Consider:
- The amount the state pays to providers on behalf of families is a fraction of the market rate.
- Arizona’s payments, such as $151 a week for an infant, are among the lowest in the nation.
- The amount paid to child care operators has not budged in 19 years. No other state has gone that long without a rate increase.
- There’s not enough money to go around: 1,042 kids are on a waitlist as of late December. Waits can be as long as eight months.
All of this plays out as $56 million in no-strings-attached aid from the federal government for Arizona goes untapped because lawmakers last spring declined to authorize its use.
“Unbelievably, the state did not accept $56 million from the federal government,” marveled Mark Werber, owner of two Tots Unlimited preschool and child care centers in the Valley. “And their rationale was there was no plan for how to spend it.”
When the Department of Economic Security submitted its latest child care proposal to federal authorities last summer, it did not include a plan for the $56 million. In response, numerous child-care operators repeated the same refrain during a public-comment period: Use the money to increase rates.
“DES reimbursement levels are not acceptable and even more not acceptable when the state has $56 million dollars of unspent federal funds to utilize,” Werber wrote in his formal comments on the state plan.
Last summer’s proposal does not meet federal requirements, potentially imperiling $150 million in federal funding, although state officials are seeking a waiver — something the U.S. Department of Health and Human Services signaled it would not accept.
In the upside-down state of Arizona’s child care system, families struggling to hold a job and keep kids safe can wait months for assistance. But if that family’s children get sent to foster care because they were left home alone, the state must by law provide child care assistance to the foster parents.
Do we leave the kids home alone?
As the state works to reduce the number of children in the custody of the Department of Child Safety, affordable child care is key to keeping children safe and families intact, child-welfare advocates say.
Yet state lawmakers have been reluctant to spend general-fund dollars on child care; for years, they have relied on federal grants and an agreement with an early-childhood organization that allows the state to draw down an additional $37 million in federal funds annually. The only general-fund investment is $7 million to pay for child care for kids in DCS custody.
The state’s lower-than-market-rate payments and the failure to use the millions of additional federal dollars have frustrated child-care providers caught between inflation and an escalating minimum wage. These lapses have also fueled a wait list that numbered 1,042 children as of late December; and discouraged eligible parents, who figure they’ll never get off the waitlist and, even if they do, worry they won’t be able to afford the co-pays that come with the state subsidy.
Without safe and affordable child care, working parents face tough choices, said Kelley Murphy, director of early-childhood policy for the Children’s Action Alliance.
“That’s when mom leaves the kids with the boyfriend or leaves the kids alone,” she said.
A hedge against child neglect
Child-care aid is one of those “pay-me-now-or-pay-me-later” situations, advocates argue. They note that during last decade’s recession, when the child-care budget was slashed, the number of kids taken into DCS custody exploded. State figures show an 82 percent increase over a seven-year period.
While the lack of affordable child care alone can’t explain the rapid increase, a study found leaving kids unsupervised or with an inappropriate caregiver was a major reason Arizona children were removed from their homes due to neglect. The Morrison Institute for Public Policy at Arizona State University analyzed DCS case files and concluded, “supervisory neglect” accounted for more than a quarter of the removals. The study was based on an analysis of 800 files from 2013-2015.
“We’d save a lot of money if we’d help the families in the beginning,” said Amy Schultz, executive secretary of the Foster Children’s Rights Coalition in Arizona.
Spending money to help families with child care also can reduce reliance on welfare, state officials say.
“The affordability of safe and stable child care may make the difference between climbing out of poverty and continuing to rely on public assistance,” the state Department of Economic Security states in its budget request for the coming year. It is seeking legislative approval to spend the extra $56 million from the federal government.
Yet there is skepticism among many state policymakers, who view state-funded child care as subsidized babysitting that undercuts self-reliance.
Lowest rates? Nah. Just the oldest
Arizona’s child-care program serves about 20,000 children a month, according to state figures. These are kids, ages 12 and under, from lower-income, working families, or households where the parents are in school or doing job training.
To qualify for assistance, a parent’s household income must be no higher than 85 percent of the median income for a family that size. In the case of a four-person family, that would be about $42,000.
Parents who qualify get a subsidy paid to their child-care provider, based on the age of the child. Those rates have not budged since 2000, leading critics to complain that Arizona has the lowest rate in the nation.
But at a public hearing last summer, DES administrator Michael Wisehart corrected that assertion.
“We don’t have the lowest rates in the nation,” Wisehart said. “We have the oldest rates.”
As for the amount, Arizona is near the bottom, according to a survey by the National Women’s Law Center. Only Georgia, Missouri and New Jersey had lower subsidy amounts in 2017, the center reported.
Arizona pays providers serving lower-income families a fraction of the market rate. For a 4-year-old pre-schooler, for example, the rate is 7 percent of the market rate, DES stated in the plan it submitted to the U.S. Department of Health and Human Services in August. For a school-aged child (6 and up), it’s 26 percent.
In Maricopa County, where child care costs can range from $200 to $240 a week for an infant, the state subsidy is $151 a week. DES charges parents a modest co-pay capped at $25 week. That means the difference has to be made up by the provider, who either adds on his own co-pay or absorbs the cost.
When 50 cents a day is too much
At the Children’s Campus in Phoenix’s Maryvale neighborhood, owners Mary Sue and Wayne Watson established a 50-cent daily co-pay for their DES clients. It’s not working.
“Charging it and collecting it are very different issues,” Wayne Watson said. The families, he explained, can’t afford it and he feels he has little recourse.
“Are you going to dismiss those children, expel them?” he asked rhetorically. Instead, Watson collects the co-pay when he can, then shoulders the remaining cost or shifts it to his private-paying clients.
This dilemma is echoed by child-care operators across the state. Many of them say they feel an obligation to serve lower-income families, recognizing there aren’t any safe alternatives for children of working parents.
Leila Serna feels the pull between making enough revenue to keep her child-care center running and factoring in the financial status of some of her clients.
One of them, a single mom of four, would lose a “big chunk” of her budget if she made the co-pay Serna charges at Little Kings and Queens Preschool in Scottsdale. So Serna eats the cost. Besides, she added, if she did push for a co-payment, she’d probably lose the client and then things could get worse for the mother.
“That’s when I hear, ‘Oh, I have my 10-year-old watching my 2-year-old’,” Serna said. “And there’s no law to say you can’t do that.”
Up to 100 centers close every year
Aside from squeezing lower-income clients, the stagnant DES rate is also squeezing child-care operators.
Erin Raden, executive director of the Arizona Early Childhood Education Association, says it has forced child-care centers to close.
State data shows the number of facilities has remained fairly stable over the last three years — about 2,700 — but there’s a lot of churn. About 50 to 100 child-care operators close their license every year, according to data from the state Department of Health Services.
The lack of a rate increase is hurting the smaller operators the most, Watson said, because they’re not part of a national chain, where costs can be spread widely.
Operators like Werber point out their contributions to the local economy. He built his two Tots Unlimited Child Care centers, creating construction jobs and then employing 60 people between his two centers.
But without a hike in the DES rate, the centers struggle to keep up with escalating costs. That includes the state minimum wage, which rises to $11 an hour this month.
Werber is amazed lawmakers turned their backs on the $56 million in extra federal dollars, especially when the state general fund does not provide any money for the DES program.
“It’s hard to believe that over a $9 billion budget, they can’t find one dollar for child care,” Werber said.
‘Free’ for foster families
The state gets $137.5 million in federal dollars to fund child care programs. About $37 million of that is made possible through an agreement with First Things First, an independent early-childhood organization. Over the last nine years, that agreement has netted an additional $340 million in federal funds for Arizona child care.
The state’s only general-fund contribution to child care is $7 million, allocated to DCS to provide the free child care that families caring for kids in DCS custody are entitled to by law.
That “free” support, however, is laughable to many foster families. The state-supplied stipend is so low that, to get into the centers they prefer, co-payments are necessary.
Tanya Brodd, who is fostering one child, pays $25 a week to a center near her home. It’s not a big hit to her budget, but when she had two foster children in care, the extra payment strained her household expenses.
“It just meant we can’t do other things,” she said. Services such as music therapy aren’t covered by insurance but are helpful in dealing with a traumatized child, she said.
Brodd could have moved her foster kids to a center without a co-pay, but that was out of the question.
The center she uses is run by a foster parent who understands the needs of foster kids, she said. Other places probably wouldn’t take one of her kids due to his higher needs, she said.
And that’s where a higher state payment could help, she said.
To meet the “quality first” standards set by First Things First, centers have to meet certain benchmarks, such as teacher training in trauma care and early-childhood development.
“If they had more money, they’d be able to train their staff,” Brodd said.
Higher standards = higher costs
The state’s increasing emphasis on high-quality child care is another complicating factor.
The Quality First program awards ratings on a five-star scale. Those that net a four-star rating qualify for a 10-percent boost in their state payment. For five stars, it’s a 20 percent increase.
The goal is laudable: to encourage centers to focus on child development rather than being a stand-in for a babysitter.
But the higher ratings come with a cost. Center operators say they need to pay more to attract the right teachers or to provide more training. In centers that rely heavily on the state support, that can be a budget-buster.
That’s what led to the demise last year of the Tucson Nursery School, located in a lower-income neighborhood.
For years, a local non-profit covered the gap between what the school received in state support and its actual costs. But that group, Child and Family Resources, decided to close Tucson Nursery School after an attempt at collecting co-payments didn’t yield enough income, said Bill Berk, a member of the non-profit board.
Board members decided if the school couldn’t meet the standards, it wasn’t worth continuing.
“It’s not enough to keep kids safe if we want them to be reading by third grade,” said Berk. “They benefit so much from high-quality child care.”
Quick OK from new Legislature?
To get money from the federal Child Care and Development Fund, states have to meet certain criteria, including a requirement that states pay a “reasonable” rate for child care.
There’s little dispute that Arizona fails to meet that standard: A 19-year-old rate is far from current, said Raden, whose organization represents child-care operators. DES acknowledges as much, asking for a waiver from the rate requirement, although federal guidelines do not grant leeway on that requirement.
For now, the plan is under review.
Since submitting its federal application in late August, DES has released its state budget request for next year, seeking legislative OK to spend the extra $56 million. Half of that money would be used to raise the state’s rate to 2010 standards; the other half would expand by 5,000 the number of children served.
Advocates such as Raden are asking lawmakers to approve the extra spending soon after they convene in mid-January. It’s unclear how that proposal will fare in a Legislature where nearly 25 percent of the members are new.
Gov. Doug Ducey has insisted since late spring that the state will spend the federal money, although he hasn’t specified when that should happen. He will release his budget proposal Jan. 14.
Child-care operators are hopeful lawmakers will act.
“I feel like taking all of our children down there (to the Capitol) and letting them run all over,” Mary Sue Watson said.
Teachers’ protests helped boost their pay earlier this year. Could a bunch of rambunctious kids do the same for their cause?
Reach the reporter at [email protected] and follow her on Twitter @maryjpitzl
About this report
This story is part of an occasional series on gaps in Arizona’s child-welfare system. A three-year grant from the Arizona Community Foundation supports in-depth research on the topic at The Arizona Republic and azcentral.com.
Are you part of the child welfare system? We want to understand your story. Visit childwelfare.azcentral.com.
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