On July 1, the state’s policies guiding child care assistance immediately reverted back to pre-COVID practices. But nothing about the context of July 1, 2020 is anything like January 1, 2020. We can’t apply pre-COVID policies in a landscape that has fundamentally changed. Instead, we need to make immediate shifts to make policies work for families and the child care industry. We need to drill down into the data to better understand current practice and where we can make changes. And we will need to provide the resources to support a new landscape.
Temporary Closure of Providers Beginning to Look More Like Permanent Closure
After more than four months of closure, many child care programs may not open again. Child Care Aware of Virginia reported that more than 1200 child care programs that would normally be open this time of year are closed. The Center for American Progress estimates that Virginia could lose up to 45 percent of child care capacity due to the pandemic. We don’t know what the child care landscape in Virginia looks like with a large reduction of available slots and staff gone. The question remains – how do state resources help programs re-open?
Family Preferences Create Uncertainty and Shifts to Smaller Programs
Some families that would have normally sent their children to preschool or child care this year will choose to keep them home to avoid exposure to the virus. Some would prefer their children to be in smaller settings such as home-based care. With family preferences changing, how do private providers and the industry respond to adjust to new models?
More School-Age Children Need Care
With the closure of schools in March, the child care needs of school-age children became a pressing need. With summer camps closed, there continues to be a pressing need for child care. With the possibility of schools reopening on a rotating schedule, or a few days a week, the needs of school-age children will be even more prominent. Most licensed or regulated child care settings could serve children up to age 13 but they are not staffed to do so, nor have the space to do so. Likewise, the state subsidy payments for school-age children assume costs when children would not be attending for full days or for short periods only.
Historical Spending Trends for Local Allocations Do Not Reflect Current Reality
The allocation of our state and federal Child Care and Development Block Grant (CCDBG) funds to localities has been based on a formula of historical spending not of estimates of need. These allocations drive how many new families a local DSS site can approve for access assistance and how many providers in a particular community might receive. To better maximize our state subsidy funding, Virginia should revisit these allocations or provide significant additional funding on top of the base allocation to localities.
Child Care Assistance Eligibility and Payment Practices Impacting Participation
Virginia sets its own parameters for the eligibility of our child care assistance funds. On July 1, 2020, these policies also reverted to a pre-COVID context. For example, families are required to pay co-pays to providers. Families are now more limited in the number of absences that a provider can be paid for even if their child gets sick or other family members get sick.
Since July 1, families can now lose their eligibility for child care assistance if they are unemployed and likely even furloughed without a rehire date. Additionally, many families may be approved for subsidy but their child care program is closed or they are not working. Families approved but not actively in child care have been factored into the payment allocations and authorized enrollment numbers. This practice impacts the ability of local DSS programs to enroll new families off the waitlist and spend down their allocations.
Another factor that will hamper the ability to provide care to school-age children is that payment rates during the school year are calculated for before and after school, not the full day. If students are expected to be with child care providers for a full day while schools are closed, VDSS will need to revise these payment practices to ensure maximum payment. While reimbursement rates vary by locality, a licensed center in Richmond City for example would only receive $30 per day for a school age child from the child care subsidy assistance program if the student attended full day.
To support the child care industry, it will be critically important to advocate for additional federal resources. To advocate for additional resources, we must also know how Virginia is using existing resources to meet needs. We encourage the state to provide more information on how $70 million in CARES Act funds have been used and if there are any unspent surpluses in the CCDF or TANF federal funds that could be used for child care needs.
VDSS must also consider their enrollment and participation date from the last four months to predict future trends. Enrollment data must be scrutinized for when cases are suspended for the parent’s work status or an available vendor. Processes can be reconsidered to create new conditions for when a family is in suspended status.
Additionally, payment practices to child care providers need to be examined and improved. A notable policy of the CARES Act grants to open providers was to provide funds to all types of providers, not those only approved to participate in the child care subsidy program. This is an important step to support a fragile industry. However, VDSS has reported that the average CARES Act grant for a three-month period was $11,000. The maximum amount a family child care provider with enrollment capped at 12 children could receive was $1,800 for these three months. These payments are helpful but fall far short of meeting the need. And they do not adequately reflect the contributions of the workforce and an industry who have accepted tremendous risks to keep children safe and to keep the rest of the workforce at work.
While the initial payments do fall short, they also provide useful lessons learned. In the practice of providing a grant payment to providers the state helped to stabilize the industry and provide a guarantee of income. Through these methods, providers could keep doors open when family choices and needs fluctuate. Using grants or contracts also provides opportunities for the state to provide course corrections in a new landscape and to seek more equitable distributions of funds. In the future, VDSS should look to grants or contracts to target geographical areas experiencing needs by funding providers for a region. Grants or contracts could also be structured to meet specific criteria such as family child care providers in communities of color or those agreeing to pay higher wages to staff. And grants or contracts can be structured to fund actual costs—salaries, cleaning supplies, hazard pay—and not the variability of funding by child.
There is no question more money will be needed to support families and the child care industry. State policymakers can start now to estimate what will be needed. Asking for transparency in how existing child care funds will be used and any available resources can provide insight in the changing landscape of how federal assistance can be used. Additionally, as state policy makers have approved the transition of CCDBG dollars to the Virginia Department of Education beginning in 2021, now is a good time to begin asking how those dollars can be aligned to educational resources to meet the needs of students returning to school, particularly in light of staggered schedules. The answer is both education and social services will fall short of the level of necessary funding, so how can any new funds allocated to the purposes of child care fall under the purview of VDOE to align with educational needs and future needs of the system?
We will need additional funds to meet the child care need going forward. Virginia’s Congressional delegation has signaled strong support for an additional $50 billion in federal funding for child care. The timing or guarantee is far from certain. In the meantime, lawmakers must call for additional funds for child care needs in the Special Session of the Virginia General Assembly to meet the needs of the changing landscape.
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